Final rule complicates the standard for franchise owners, contractors, and small businesses
WASHINGTON, D.C. (October 26, 2023) – The National Federation of Independent Business (NFIB), the nation’s leading small business advocacy organization, issued the following statement regarding the National Labor Relations Board’s final joint-employer rule, which will rescind and replace the previous joint-employer standard enacted in 2020. The Board’s new standard significantly expands when employers will be deemed a joint-employer under the National Labor Relations Act.
“NFIB is extremely disappointed by the Board’s new joint-employer rule. It is one more onerous regulatory change for small businesses to navigate,” said Beth Milito, Executive Director of NFIB’s Small Business Legal Center. “The arbitrary standards outlined in this rule will make compliance a nightmare for small business owners who do not have the teams of lawyers, accountants, and compliance staff needed to navigate these vague and subjective definitions. Also concerning is that the rule expressly declined to exempt franchises and small businesses. Independent franchisees may lose control over their workforce under the new standard. NFIB agrees with dissenting member Kaplan that this new joint-employer standard is ‘catastrophic’ and urges the NLRB to seek a standard that provides the clarity and consistency that small businesses need.”
In 2020, NFIB supported the U.S. Department of Labor’s previous joint-employer rule, which simplified the determination of joint-employer status. The 2020 standard focused on the actual exercise of control over workers to determine joint-employer status. The Board’s new standard is much broader, permitting employers who have indirect control or unexercised control to be classified as joint employers.
The NFIB Small Business Legal Center protects the rights of small business owners in the nation’s courts. NFIB is currently active in more than 40 cases in federal and state courts across the country and in the U.S. Supreme Court.
