NLRB Goes Back to the Employer-Friendly Future as It Reinstates Strict Joint-Employer Rule

Takeaways

• The NLRB issued a final rule restoring the 2020 joint-employer standard, replacing the broader Browning-Ferris approach that had been reinstated in a 2023 rule that never took effect. 
• Under the rule, a company is a joint employer only if it possesses and exercises substantial, direct and immediate control over at least one essential term of employment, such as wages. 
• Sporadic, isolated or de minimis control does not create joint-employer status.

Related links

• 91 Fed. Reg. 9707, Withdrawal of 2023 Standard for Determining Joint Employer Status
• Labor Board Issues Final Rule for Determining Joint-Employer Status 
• Labor Board (Again) Returns to Broader Rule for Determining Joint-Employer Status

Article

With its newly restored quorum, the National Labor Relations Board published a final rule for determining a joint employer under the National Labor Relations Act, reinstating its long-standing rule and higher threshold for determining joint-employer status. The rule went into effect on Feb. 27, 2026.

The final rule returns to the 2020 standard issued under the first Trump Administration that vacated the Board’s broader 2015 standard under Browning-Ferris Industries of California, Inc., 362 NLRB No. 186. Under the reinstated rule, a business must possess and exercise “substantial direct and immediate control” over at least one essential term and condition of employment of another employer’s employees to be found a joint employer.

The rule defines “substantial” direct control as actions that have “a regular or continuous consequential effect” on one of the eight core aspects of a worker’s job. These “essential terms and conditions of employment” are:

1. Wages
2. Benefits
3. Hours of work
4. Hiring
5. Discharge
6. Discipline
7. Supervision
8. Direction

Importantly, the rule provides that even where an employer exercises direct control over another employer’s workers, it will not be held to be a joint employer if such control is exercised on a sporadic, isolated, or de minimis basis.

The Board determined that its issuance of the final rule is “ministerial in nature” because the prior 2023 rule returning to the Browning-Ferris standard was vacated before it took effect. As a result, a notice-and-comment period is unnecessary.

Jackson Lewis attorneys are committed to helping employers make the best business decisions. Please contact a Jackson Lewis attorney with questions on the final rule and the Board.