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DOL Rescinds Joint Employer, Independent Contractor Guidance

DOL Rescinds Joint Employer

The Department on Labor (DOL) has withdrawn burdensome guidance released by the Obama Administration in January 2016 that significantly broadened the definition of a joint employer. The June 7th action represents an important first step in overturning the National Labor Relations Board’s (NLRB) August 2015 joint employer standard that could potentially make apartment firms liable for the actions of their subcontractors, suppliers, vendors and temporary staff. NAA/NMHC have long supported rescinding this onerous standard. 

Joint employers occur when the supervision of an employee’s activity is shared between two or more businesses. The NLRB 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.”

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.

With the Trump administration taking steps to roll back the regulatory regime, NAA/NMHC will continue to monitor progress on this issue.

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