On Feb. 26, the National Labor Relations Board (NLRB) issued a new rule regarding the standard for determining the status of a joint employer under the National Labor Relations Act (NLRA). The new rule effectively disposes of the NLRB’s previous standard, defined in Browning-Ferris Industries, 362 NLRB No. 186 (2015), which stated that a business qualifies as a joint employer if it exhibits “indirect” control or the ability to exert such control over employees.

Under the new rule, a business will only be considered a joint employer of another employer’s employees if the business possesses and exercises substantial direct and immediate control over one or more essential terms and conditions of the employees’ employment. The rule also defines the term “substantial direct immediate control” as control that has a regular or continuous consequential effect on an essential term or condition of employment of another employer’s employees. Such control is not “substantial” if it is only exercised on a sporadic, isolated, or de minimis basis.