As seen in The Business Journals (September 2015)

If you hire contract or temporary employees to cover your labor needs, you should know about a new ruling by the National Labor Relations Board (NLRB) that may change the way you view outsourcing.

The NLRB recently revised its joint-employer standard in Browning-Ferris Industries of California, Inc. As a result, companies that use contract labor or temporary employees must now carefully consider how joint-employer issues may reshape the way they do business.

A company that is determined to be a joint employer with its temporary agencies or other outside entities can find itself subject to employment litigation, such as discrimination claims or union activity on behalf of workers it did not ever intend to hire.

This case arose from a union action against Browning-Ferris (BFI), which operates a recycling facility with its own employees (who are represented by a union) along with workers provided by another entity, Leadpoint.

Leadpoint supplied these workers to BFI under a temporary labor services agreement. The agreement provided that Leadpoint was the sole employer of the non-BFI workers and that they were not union members.

The union filed a petition seeking to represent the non-BFI workers, and the result is this NLRB decision, which has now expanded the definition of joint employer, noting that the prior standards had become increasingly out of line with current practices, such as the increased use of staffing and subcontracting agreements and contingent and temporary employment arrangements.

MAJOR CHANGE

The BFI decision represents a big shift in the way the employer/employee relationship is defined.

Previously, two companies were not considered joint employers unless they shared and exercised control of matters such as hiring, firing, discipline, supervision, wages, hours, the number of employees, scheduling, overtime and work assignments — the issues governing the essential terms and conditions of employment.

Now, the NLRB will no longer require that a company exercise authority or have direct and immediate control over the terms and conditions of employment to be a joint employer.

To read full article, click here.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.