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

Economics
Oct 19, 2026
Builder Sentiment Falls on Rising Rates

Builder confidence in the market for newly built single-family homes fell three points to 29 in October, according to the NAHB/Wells Fargo Housing Market Index (HMI) released today. The reading was the lowest since June 2012.

Safety
Oct 16, 2026
The Importance of Safety Guardrails on a Home Building Site

Join NAHB and its official safety sponsor, Builders Mutual, as we celebrate the seventh annual Guardrail Safety Week, Oct. 19-23, and be part of the difference proper guardrail use makes in protecting workers and saving lives.

View all

Latest Economic News

Economics
Oct 16, 2026
Single-Family Permitting Declines Through August

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

Economics
Oct 16, 2026
Research Highlights the Broad Benefits of Homeownership

A rich, peer-reviewed academic literature finds that homeownership produces benefits that extend well beyond house-price appreciation.

Economics
Oct 15, 2026
Building Material Price Inflation Nears Four Year High

The Producer Price Index for final demand was up 1.3% in September, after rising 0.5% in August. Compared to a year ago, final demand prices were up 6.3%.