New Labor Regulation Expands Definition of Joint Employer, Facilitating Unionization in Franchises and Contractor Businesses

New Regulation, Effective in 60 Days, Classifies Companies as Joint Employers Even with Indirect Control, Prompting Legal Threats from Business Groups and Calls for Congressional Overturn

The National Labor Relations Board has issued a new labor regulation broadening the definition of 'joint employer', making it easier for workers in franchises and companies using temporary staffing agencies and contractors to unionize.
The revised rule proposes that two or more entities can be considered joint employers of a group of employees if they both have an employment relationship with the workers and help to determine their terms and conditions of employment.
Opposing business groups have threatened legal action against the new regulation, with concerns that it will lead to increased chaos and legal confusion for both employers and workers.
The sectors expected to be most affected by the change are franchise businesses and companies that use temporary staffing. Giants such as Amazon and McDonald's, which rely heavily on contract workers, may now be required to negotiate with unions.
Under previous regulations, companies could only be considered joint employers if they exercised substantial direct and immediate control over their workers. The new rule, however, applies even if the control is 'indirect'.