Many of the fastest growing industries utilize subcontracted or non-standard work structures to get the job done – outsourcing is king in today’s economy.
The expanded use of contractors leaves many workers lacking the traditional benefits of being categorized as an employee, saving many companies across the U.S. millions.
In a recent decision by the the National Labor Relations Board (NLRB), the definition of “employer” may be evolving. The NLRB recently set the stage for change by determining a company and their subcontractor are considered joint employers in a case involving sanitation workers.
The sanitation company in question utilizes employees from a temporary labor service agency in it’s plant. Although the contract between the company and the staffing agency stated that the latter was the sole-employer of the workers, the NLRB found otherwise.
Using a two-step model, the Board determined that, one, the two statutory employers have a common-law employment relationship with the employees and, two, that the employer (in this case both the sanitation company AND the employment agency) ‘possess’ sufficient control over the essential terms and conditions of employment. Therefore, the parties should be looked upon as joint employers of the workers in question.
If the joint-employer ruling stands, it could have huge implications in terms of liability for companies using contracted or temporary workers, franchisors and so-called shared economy model companies such as Uber proliferating on the internet. It will result in entities that use contingent workers more likely to be deemed joint employers for union representation purposes, potentially translating into increased benefits for many employees.
Source: CNBC, “NLRB Ruling Redefining ‘Employer’ Could Have Big Impact If It Stands”, by Martha C. White, accessed August 30, 2015.