NLRB reverts joint‑employer rule
The National Labor Relations Board has withdrawn its 2023 joint‑employer rule and reinstated the 2020 standard, a formal change to how employer responsibility is judged. (hrworks-inc.com) This shift is being read as more employer‑friendly and means workplace communication and documentation are likely to become more procedural and scrutinised. (nhbr.com)
A company that sets the rules for your schedule, your pay, or your discipline can end up treated like your boss even if another company signs your paycheck. On February 27, 2026, the National Labor Relations Board formally pulled its 2023 joint-employer rule and put its 2020 rule back in place effective immediately. (federalregister.gov) That sounds technical, but it hits ordinary setups people see every day: franchise chains, staffing agencies, warehouses run by contractors, and construction sites with subcontractors. The fight is over when two businesses are both legally responsible for bargaining with a union or for unfair labor practices involving the same workers. (nlrb.gov) The 2020 rule uses a narrower test. It says a business is a joint employer only if it has and exercises “substantial direct and immediate control” over one or more essential terms of employment, not just a distant or theoretical ability to step in. (nlrb.gov) The 2023 rule tried to cast a wider net. It said a company could count as a joint employer if it shared or codetermined essential terms and conditions of employment, and it treated reserved control or indirect control as relevant even when that control was not exercised day to day. (nlrb.gov) The National Labor Relations Board listed seven “essential terms and conditions” in that 2023 rule: wages, benefits, hours and scheduling, assignment of duties, supervision, work rules and discipline, hiring and discharge, and safety and health conditions. That is why the rule drew so much attention from franchisors and companies that manage labor through contractors. (nlrb.gov) The 2023 rule never really got to run. A federal judge in the Eastern District of Texas vacated it on March 8, 2024, after a lawsuit brought by the U.S. Chamber of Commerce and other business groups, and the National Labor Relations Board later dismissed its appeal on July 19, 2024. (nlrb.gov) (uschamber.com) (sullcrom.com) The new 2026 action is the paperwork step that catches the regulations up with that court loss. The Federal Register notice says the board is simply replacing the vacated 2023 text with the earlier 2020 text that remained in effect because of the vacatur. (federalregister.gov) For employers, the practical effect is a higher bar before a parent company, brand owner, or client company gets pulled into labor disputes involving another firm’s workers. For unions and workers, it usually means fewer paths to force the bigger company in the chain to the bargaining table. (nlrb.gov) (ogletree.com) That is why lawyers are telling businesses to get more precise about contracts, supervision, and documentation. If the legal line now turns more heavily on direct and immediate control, every email about scheduling, discipline, staffing levels, or work rules becomes more important evidence of who is really acting like the boss. (mcdonaldhopkins.com) (nhbr.com) This is also one more example of how labor law keeps swinging with changes in the board, the White House, and the courts. The 2020 rule took effect on April 27, 2020, the 2023 replacement was published on October 27, 2023, a court wiped it out on March 8, 2024, and the board formally restored the 2020 standard on February 27, 2026. (nlrb.gov 1) (nlrb.gov 2) (federalregister.gov)
