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

Energy
Aug 17, 2026
HUD Releases New HOME and HTF Energy Standards Following NAHB Win

Following key code victories secured by NAHB earlier this year, HUD has revised the energy standards that HOME Investment Partnerships Program (HOME) Participating Jurisdictions and Housing Trust Fund (HTF) grantees must meet for newly constructed housing.

Economics
Aug 17, 2026
Affordability Pressures Keep Builder Confidence Low

Builder confidence in the market for newly built single-family homes inched up one point to 35 in August, according to the NAHB/Wells Fargo Housing Market Index (HMI) released today.

View all

Latest Economic News

Economics
Aug 17, 2026
Consumer Credit Slowed in Q2

In the second quarter of 2026, consumer credit growth slowed over the quarter and was lower than a year ago. According to the Federal Reserve’s G.19 Consumer Credit Report, total outstanding U.S. consumer credit reached $5.17 trillion in the second quarter of 2026.

Economics
Aug 17, 2026
Affordability Pressures Keep Builder Confidence Low

Builder sentiment remains muted from economic and geopolitical uncertainty, elevated mortgage rates and rising construction costs.

Economics
Aug 14, 2026
Single-Family Permitting Declines Through June in Contrast to Multifamily

Single-family permitting activity continued to weaken through the first half of 2026, while multifamily permitting remained somewhat stronger compared with the same period last year.