NLRB Formally Withdraws Biden-Era Joint Employer Standard

On February 26, 2026, the National Labor Relations Board ("NLRB" or the "Board") published a final rule formally withdrawing its 2023 joint employer regulation and reinstating the narrower 2020 standard for determining joint employer status under the National Labor Relations Act ("NLRA").

Under the reinstated 2020 rule, joint employer status only will be found where "two employers share or codetermine the employees' essential terms and conditions of employment." An entity must possess and exercise "substantial direct and immediate control" over one or more essential terms of employment to warrant finding that the entity meaningfully affects matters relating to the employment relationship with those employees. The rule specifies that control will not be considered "substantial" if it is only exercised on a "sporadic, isolated, or de minimis basis."

The rule enumerates eight categories of essential terms and conditions of employment and describes the manner of conduct that would constitute "direct and immediate control":

1. Wages. May be established where an entity actually determines the wage rates, salary or other rate of pay that is paid to another employer's employees.
2. Benefits. May be established where an entity actually determines the fringe benefits to be provided or offered to another employer's employees, such as selecting benefit plans or level of benefits. An entity merely allowing another employer, under an arms-length contract, to participate in its benefits plans is not sufficient.
3. Hours of Work. May be established where an entity actually determines work schedules or the work hours, including overtime, of another employer's employees. An entity merely establishing operating hours is not sufficient.
4. Hiring. May be established where an entity actually determines which particular employees will be hired and which employees will not. An entity requesting changes in staffing levels or setting minimal hiring standards is not sufficient.
5. Discharge. May be established where an entity actually decides to terminate the employment of another employer's employee. An entity raising attention to misconduct or setting minimal standards of performance is not sufficient.
6. Discipline. May be established where an entity actually decides to suspend or otherwise discipline another employer's employee. The Board specifically notes that "refusing to allow another employer's employee to access its premises or perform work under a contract" is not sufficient to establish this factor.
7. Supervision. May be established where an entity actually instructs another employer's employees how to perform their work or by actually issuing employee performance appraisals. An entity providing limited or routine instructions or "telling another employer's employees what work to perform, or where and when to perform the work, but not how to perform it" is not sufficient.
8. Direction. May be established where an entity assigns particular employees their individual work schedules, positions, and tasks. An entity merely setting schedules for completion of a project or describing the work to be accomplished on a project is not sufficient.

For employers who work with contractors or other third parties, the reinstatement of the 2020 rule reduces the risk that the NLRB will find joint employer status based solely on indirect control or contractual authority that is never exercised. However, employers should still review their contracts and day-to-day practices. The rule emphasizes actual conduct over contractual labels, meaning that even well-drafted agreements will not provide protection if an entity exercises substantial, direct, and immediate control in practice.

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.