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House Committee Rules Against Joint Employer Rule

The House Appropriations Committee on July 12 released its draft Fiscal Year 2018 Labor-HHS-Education appropriations bill with a policy rider that would deny the National Labor Relations Board (NLRB) the ability to enforce or litigate its so-called joint employer rule. The NLRB’s new standard could potentially make apartment firms liable for the actions of their subcontractors, suppliers, vendors and temporary staff. Importantly, this definition requires joint employers to negotiate with any union representing the jointly employed workers and share liability for National Labor Relations Act violations. This could mean forcing an apartment firm to pay fines for employees of suppliers who violate federal labor laws.

This policy rider comes on the heels of the Department of Labor in June withdrawing burdensome guidance released by the Obama Administration in January 2016 that significantly broadened the definition of a joint employer.

Joint employers occur when the supervision of an employee’s activity is shared between two or more businesses. The NLRB in August 2015 ruled that it could impose joint employer liability when an entity has “indirect” control and “unexercised potential” of control over another entity’s employees. This is a significant change from the status quo of the past 30 years when entities were designated joint employers when both had “direct and immediate” control over “essential terms and conditions of employment.”

NAA/NMHC have long supported rescinding this onerous standard.

Provided by NMHC as part of the NAA/NMHC Joint Legislative Program