Final NLRB Joint Employer Rule is a Win for Small Business Community
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.
Latest from NAHBNow
Jul 18, 2025
Single-Family Starts Weaken in June as Affordability Challenges PersistDue to a solid increase in multifamily production, overall housing starts increased 4.6% in June to a seasonally adjusted annual rate of 1.32 million units, according to a report from the U.S. Department of Housing and Urban Development and the U.S. Census Bureau.
Jul 17, 2025
Stay on Top of Wood Framing Safety PoliciesWood framing is an integral part of the home building process, and one job that many general contractors take on themselves. But even with familiarity of the task, specific safety precautions should be followed during framing.
Latest Economic News
Jul 18, 2025
Single-Family Starts Weaken in June as Affordability Challenges PersistSingle-family housing starts declined in June to the lowest rate since July 2024 as elevated interest rates, rising inventories and ongoing supply-side issues continue to act as headwinds for the housing sector.
Jul 17, 2025
Builder Confidence Edges Up in JulyBuilder confidence for future sales expectations received a slight boost in July with the extension of the 2017 tax cuts, but elevated interest rates and economic and policy uncertainty continue to act as headwinds for the housing sector.
Jul 16, 2025
Producer Prices for Metals and Equipment Show Large IncreasesResidential building material prices rose in June, driven primarily by higher construction machinery and equipment part prices. Metal commodities also experienced significant increases, following recently implemented tariffs on steel and aluminum. Meanwhile, price growth for services used in construction continues to outpace both domestic and imported goods.