The National Labor Relations Board has announced that the effective date of its new “joint employer” final rule is postponed by two months. The announcement coincides with several legal challenges to the rule, previously scheduled to become effective on Dec. 26, 2023. The extended effective date is Feb. 26, 2024.
The final rule has significant implications for employers. Among other things, it would broaden the joint-employer standard to include anyone controlling just one of seven “essential terms and conditions of employment.”
According to the Board’s website, the Board extended the date in order to “facilitate resolution of legal challenges with respect to the rule.” Indeed, there have been several challenges to the final rule since it was announced. For example, on Nov. 9, the U.S. Chamber of Commerce and a coalition of business groups filed a lawsuit challenging the rule as statutorily unauthorized, arbitrary, and capricious. The final rule has also encountered political challenges, with lawmakers introducing a resolution in the Senate to overturn the rule.
Given the number of challenges to the final rule and their complexity, it remains uncertain whether the effective date will be extended again beyond February 2024. Prudent employers, however, should assume the rule will go into effect in February and prepare accordingly by carefully reviewing any commercial agreements with other companies to determine whether a joint-employer relationship may be established.
Please contact a Jackson Lewis attorney with questions on the Final Rule and how it may impact your organization.