Rule lowers threshold for when GCs are considered joint employers of subcontractors

By KERRY SMITH

TYLER, Texas – In light of boisterous opposition from weighty pro-business organizations including the U.S. Chamber of Commerce, U.S. District Judge J. Campbell Barker delayed the effective date of the National Labor Relation Board’s “joint employer” rule until March 11.

The U.S. Chamber launched a suit against the NLRB in November 2023, claiming the rule violates federal labor law and will cause disruptions in a number of industries – including construction – that rely heavily on temporary and contract labor.

The new rule is actually a close version of a 2015 NLRB rule on the same topic.

Construction companies – namely general contractors – are among those arguing against it. The language says, in essence, that any employer that is deemed to also be an employer of another company can face litigation for its joint employer status.

With multiple subcontractor firms working for a GC on a typical construction project, the lower threshold that this latest NLRB rule lays out makes a general contractor more vulnerable to being labeled as a joint employer.

The new/revised rule is markedly distinct from the existing rule, which came into being during 2020.

GC firms say they’re toughening up their contract language – to ward against being found liable for their subcontractors’ employees – in light of the latest joint employer rule in anticipation of its going into effect March 11.

This is the second time the latest NLRB joint employer rule has been delayed this year.