February 27, 2026
NLRB Publishes Final Joint Employer Rule
If you read about the U.S. Department of Labor’s publication of a proposed independent contractor rule, you might wonder if the two agencies are working in tandem; I did. On the same day, the National Labor Relations Board published its final rule on joint employer status, effective February 27th.
This rule did not go through a notice and comment period. Why? This is essentially the same rule published in the prior Trump administration in 2020. A new rule was published under the Biden Administration in October 2023. That rule was struck down by a federal court and vacated in March 2024. Today, the NLRB’s position is that since the 2023 never took effect the 2020 rule “remains the operative rule for determining joint employer status.” All the NLRB is doing is replacing in the federal regulations “the text of the vacated 2023 Rule with the text of the 2020 Rule, which remains in effect.”
What is this about? The question of joint employment may arise when two entities share control over the same worker. How do we determine if they are actually joint employers over the same employee? Common scenarios include an employer who engages a worker through a temporary employment agency, or a prime contractor who occasionally directs the work of some employees of a subcontractor.
What difference does it make? Joint employers may share responsibility and liability for the shared worker, such as providing a reasonable accommodation under the Americans with Disabilities Act; reinstating a worker upon return from leave under the Family and Medical Leave Act; paying overtime under the Fair Labor Standards Act; and more.
So, what is the rule today? “An employer…may be considered a joint employer of a separate employer’s employees 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 such substantial direct and immediate control over one or more essential terms or conditions of their employment…” (emphasis added) The 2023 rule held that if an employer had reserved the right to exercise control over a worker, such as from language within a contract, it could be a joint employer, even if that control was never exercised. That created greater risk for employers. In addition, today’s rule clarifies that control is not “substantial” if only exercised on a sporadic, isolated, or de minimis basis.
Practical Application? While this is generally good news for employers, HR professionals and business owners should remain diligent in reviewing contract language related to the use of non-employee workers such as temps and (sub)contractors. If you do not intend to be a joint employer, consider language in your contract that suggest you may exert control over “[e]ssential terms and conditions of employment [meaning] wages, benefits, hours of work, hiring, discharge, discipline, supervision, and direction.” If such language exists, talk to your company’s legal counsel to determine whether it should be removed before you sign it.
