Final NLRB Joint Employer Rule is a Win for Small Business Community

Labor
Published

In an important win for NAHB members and the small business community, the National Labor Relations Board (NLRB) released a final rule that clarifies the standard for determining whether two employers are joint employers of a group of workers under the National Labor Relations Act.

This resolves the NLRB’s controversial 2015 decision in the case of Browning-Ferris Industries that radically expanded the traditional test for establishing joint employment. Today’s final rule specifies that an employer may be considered a joint employer of a separate employer’s employees only if the two employers share or codetermine the employees’ essential terms and conditions of employment, which are exclusively defined as wages, benefits, hours of work, hiring, discharge, discipline, supervision, and direction.

Importantly, the final rule retains the requirement that direct and immediate control over essential terms and conditions of employment be “substantial” to give rise to joint-employer status. Control is substantial if it meaningfully affects matters relating to the employment relationship. Such control is not “ substantial” if it is only exercised on a sporadic, isolated, or de minimis basis.

Indirect influence and contractual reservations of authority are no longer sufficient to establish a joint-employer relationship.

NAHB views this NLRB ruling as a positive development because it provides home building firms and small businesses clarity and certainty regarding the joint employer rule by restoring the traditional definition of joint employment in which a company must exercise “direct and immediate control” over a worker in a business-to-business relationship.

In announcing the final rule, NLRB Chairman John Ring said: “With the completion of today’s rule, employers will now have certainty in structuring their business relationships, employees will have a better understanding of their employment circumstances, and unions will have clarity regarding with whom they have a collective-bargaining relationship.”

For more information, contact David Jaffe at 800-368-5242 x8317.

Subscribe to NAHBNow

Log in or create account to subscribe to notifications of new posts.

Log in to subscribe

Latest from NAHBNow

Membership | Leadership Development | Leadership Meetings

Mar 11, 2026

Emerging Leader Grant Opens the Door to National Leadership for More Members

Is a member leader at your HBA planning to attend their first NAHB leadership meeting this spring? Encourage them to apply for the NAHB Emerging Leader Grant. Applications are due April 20.

Advocacy | Legal

Mar 11, 2026

Podcast: Massive Win in Battle Over Federal Energy Code Mandates

On the latest episode of NAHB’s podcast, Housing Developments, CEO Jim Tobin and COO Paul Lopez welcome VP of Legal Advocacy Tom Ward to discuss the impact of the recent court decision on the Department of Housing and Urban Development’s (HUD) and the Department of Agriculture’s (USDA) final determination to impose the 2021 International Energy Conservation Code (IECC) and the 2019 ASHRAE 90.1 standard on certain single-family and multifamily housing programs.

View all

Latest Economic News

Economics

Mar 11, 2026

Inflation Steady Before War

After months of downward trend, inflation held steady at an eight-month low in February. This report does not reflect the recent surge in oil prices due to Iran conflict beginning February 28. Higher oil prices will likely translate into higher gasoline costs and impact other sectors associated with transportation including airline tickets.

Economics

Mar 11, 2026

Single-Family Permits End 2025 on a Soft Note

Single-family permitting softened over the course of 2025 and finished the year weaker than the prior year. After showing some resilience in 2024, permitting activity gradually lost momentum as elevated mortgage rates and ongoing affordability constraints weighed on buyer demand.

Economics

Mar 10, 2026

Existing Home Sales Rose in February

Following the sharp decline last month, existing home sales bounced back in February as housing affordability improved. Lower mortgage rates and moderating home price growth helped pull buyers back to the market. However, tight inventory will likely continue to push home prices higher if demand outpaces supply growth.