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NLRB Restores 2020 Joint Employer Standard
The NLRB delivered good news to employers looking for clarity when dealing with joint employer issues. On February 26, 2026, the NLRB restored its 2020 employer-friendly rule regarding joint employer standards, replacing the broader rule that was issued in 2023 but never went into effect.
As a reminder, the concept of joint employment involves situations where multiple legal entities exert control or influence over workers, making them all employers of the worker. This is essential to understand as the implications are significant, including shared liability for unfair labor practices and obligations.
Under the 2020 rule, a company is a joint employer only if the two employers “share or codetermine the employees' essential terms and conditions of employment.” To establish that an entity shares or codetermines the essential terms and conditions of another employer's employees, the entity must possess and exercise substantial, direct, and immediate control over at least one essential term of employment. Essential terms and conditions of employment include wages, benefits, hours of work, hiring, discharge, discipline, supervision, and direction.
“Substantial direct and immediate control” means direct and immediate control that has a regular or continuous consequential effect on an essential term of employment. It does not include sporadic or isolated control or control on a de minimis basis. Evidence of indirect control is probative of joint employer status, but only if it supplements and reinforces evidence of an entity's direct and immediate control.
The 2020 rule is narrower and more employer-friendly than the 2023 rule, which provided that even indirect control or reserved authority over essential terms of employment can establish joint employer status. Check out our previous alert on this topic for a discussion of the differences between the 2020 and 2023 rules.
This change brings clarity to this important issue. It is important to remember that joint employer status still depends on the totality of the circumstances, and there may be joint employer standards at the state level that must be considered. Please let us know if you would like us to review your employment contracts and policies to determine your risk in this area.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
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