Entrepreneurs and Small Businesses Welcome NLRB’s Proposed “Joint Employer” Rule

By at 14 September, 2018, 1:09 pm



Washington, D.C. –  Small Business & Entrepreneurship Council (SBE Council) president & CEO Karen Kerrigan commended the National Labor Relations Board (NLRB) for moving forward with a proposed rule that would reestablish a rational definition for the purpose of determining a joint-employer. On September 13, the NLRB announced that a proposed rule would be published in the Federal Register today.

“Predictability on the joint-employer standard is so vital to the business ecosystem, especially in a growing economy where small businesses want to take advantage of new contracting opportunities or collaborative projects with other firms. Individuals want to start new businesses and perhaps pursue franchising as an option. So, fixing the vague joint-employer standard and the uncertainty it has caused are very important for both new and seasoned entrepreneurs. We are very pleased that the NLRB has moved quickly on its proposed rule, which essentially restores common-sense standards to what constitutes a joint-employer.  This rational and straightforward approach is welcome news to entrepreneurs and small businesses,” said Kerrigan.

Kerrigan said that language in the proposed rule provides clarity for small businesses. The summary of the proposed rule reads:

“The Board believes that this rulemaking will foster predictability and consistency

regarding determinations of joint-employer status in a variety of business relationships, thereby

promoting labor-management stability, one of the principal purposes of the Act.  Under the

proposed regulation, 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, such as hiring, firing, discipline, supervision, and direction.  More

specifically, to be deemed a joint employer under the proposed regulation, an employer must

possess and actually exercise substantial direct and immediate control over the essential terms

and conditions of employment of another employer’s employees in a manner that is not limited

and routine.”

The public will have 60 days to comment on the proposed rule, and SBE Council will engage its members in support of the proposal.

Fixing the joint employer standard is a key priority for SBE Council, as outlined in its Regulatory System Transformation and Reform agenda. On November 7, 2017 the U.S. House passed the “Save Local Businesses Act,” (H.R. 3441), which establishes clear definitions for joint employment under the National Labor Relations Act and the Fair Labor Standards Act. Under the bill, an employer may be considered a joint employer of a worker only if it “directly, actually, and immediately” exercises significant control over the primary elements of employment, such as hiring, firing, determining pay, or supervising employees on a routine basis. The bill awaits action in the U.S. Senate.

Related content from SBE Council:

Back from the Dead: NLRB’s Vague and Expansive Joint Employer Standard, February 28, 2018 (Media release).

Coalition Letter to U.S. Senate Leaders: Stabilizing the Definition of Joint Employer  – Pass the “Save Local Business Act,” February 2018.

Save Local Business Act Provides Needed Fix for Small Businesses, Small Business Insider blog post, August 2017.

Arslan Featured in Daily Caller: Popcorn and Policy to Ease Joint Employer Rule, June 2017.


Karen Kerrigan,   

SBE Council is a nonpartisan, nonprofit advocacy, research and education organization that works to protect small business and promote entrepreneurship. For nearly 25 years SBE Council has worked to successfully implement a range of policy and private sector initiatives to strengthen the ecosystem for startups and small business growth. To learn more, visit SBE Council’s website: Follow on Twitter: @SBECouncil

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