On September 13th, the National Labor Relations Board (NLRB) announced that it will propose a new joint employer rule that represents a relaxation of the current standard for determining if businesses are joint employers.  Under the current rule, known as the Browning-Ferris rule, the definition of joint employer is expansive, so that an employer having only indirect or potential control over another employer’s workers can be found to be a joint employer.

Under the proposed rule, an employer may be found to be a joint employer of another employer’s employees only if it possesses and exercises substantial, direct and immediate control over the essential terms and conditions of employment, and it has done so in a manner that is not limited and routine.  Indirect influence over the other employer, or reserving authority in a contract to exercise authority over the other employer, would no longer be sufficient to establish a joint employer relationship.

It will come as no surprise to California employers that the rules on joint employment in California are a bit more tricky.  In California, employers can be held to be joint employers when an employer has the ability to prevent the worker from performing services, or when an employer or person  exercises control over the wages, hours or working conditions of any person, directly or indirectly.  Given that there are a variety of factors involved, California employers should be careful to properly analyze any potential joint employer situation before reaching any conclusion.