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

Education
Sep 28, 2026
Utilize Competive Analysis Tools to Boost Home Sales Skills

Despite persistent affordability challenges including elevated mortgage rates, new home sales improved in August. Now is a great time to sharpen home sales skills.

Economics
Sep 28, 2026
Median Revenue of NAHB Remodelers Grows 24%

According to the NAHB Member Census, 21% of NAHB builder members listed residential remodeling as their primary business. These remodelers tend to be relatively small, with a median of five employees and a median annual revenue of $2.1 million.

View all

Latest Economic News

Economics
Sep 28, 2026
Market Share of 5,000+ Sq. Ft. Homes Edges Higher in 2025

New homes with 5,000 square feet or more of living space posted an increase in market share last year. In 2025, 27,000 homes of this size were started, accounting for 2.9% of all new homes started. Both the number and market share of homes with 5,000 square feet or more increased from 2024, according to annual data from the Census Bureau’s Survey of Construction (SOC).

Economics
Sep 28, 2026
NAHB Remodelers: What the Data Says

Twenty-one percent of NAHB builder members listed residential remodeling as their primary business, according to the 2025 Member Census. These remodelers tend to be relatively small, with a median of five employees and a median annual revenue of $2.1 million. This means that remodelers are even smaller than NAHB builder members, who had a median of six employees and median annual revenue of $3.7 million, as reported in a recent post.

Economics
Sep 25, 2026
State and Local Government Tax Revenue Grows

Total tax revenue collected by state and local governments was up 5.8% from a year ago in the second quarter, according to the Quarterly Summary of State and Local Government Tax Revenue published by the U.S. Census Bureau. This was the highest year-over-year growth since the third quarter of 2024 (7.2%).