HR Policy Advocates Against Expansive Joint Employer Rule

The Association filed comments with the National Labor Relations Board regarding its proposed rule on joint employer liability under federal labor law. HR Policy urged the Board to carve out from joint employer liability CSR programs, ESG initiatives, and other similar standard-setting that benefits American workers, and highlighted the overly broad and undefined nature of the proposed rule. 

The Association highlighted the proposed rule’s unprecedented expansion of the scope of joint employer liability. “The proposed rule is overly broad and leaves key terms undefined and unlimited, with the result being a standard that is deliberately vague regarding where joint employer liability begins and ends,” our comments note. “Regulations should provide stakeholders with a clear understanding of their legal obligations and promote efficient compliance,” goals which the Association argued that the proposed rule fails to achieve.

Our comments further argued that the proposed rule improperly disincentivizes employers from setting standards for parties with which they do business through CSR programs, ESG initiatives, and safety and health initiatives, among other mechanisms. “Such efforts benefit workers and society by establishing minimum standards through a company’s business and supply chain for worker safety, benefits, sustainability, and may other areas that promote a better economy for all. The proposed rule’s overly expansive approach would attach joint employer liability to employers for setting such standards and therefore disincentivize employers from doing so, to the detriment of American workers.”

Outlook: The proposed rule is the latest episode of the seemingly never-ending joint employer saga at the Board that stretches back nearly a decade, which has created a continuous state of compliance uncertainty for all stakeholders. Employers can expect the Board to issue a final rule sometime next year, with litigation challenges from the business community surely to follow.