At the end of August, the National Labor Relations Board (NLRB) issued a ruling that made it easier for some independent contractors to get the benefits of employees. This ruling may have an effect on you if you are:
- An independent contractors that work for staffing agency, the agency OR a businesses that hires these types of temp workers
- Other companies that primarily rely on freelancers to do the work for their businesses
- Franchise owners (both franchisors and franchisees) and their workers.
Per Noam Scheiber and Stephanie Strom, this new ruling states that the business that hires these independent contractors can be deemed their “Joint Employers” even though they do not directly supervise these workers. The NLRB issued this ruling after they found that that a business (Browning-Ferris) was the joint employer of the temp workers they hired from a staffing agency (Leadpoint) because of the level of control they had over these workers. This is a major departure from the previous rule which states that a joint employer is someone who had “direct and immediate control” over the working conditions of the contractors or the employees of franchisees. Though it is expected that this rule will be challenged in court, it will take years before there is a final decision. Until then, everyone is bound by these new regulations.
So, if you are a business owner that sometimes hire from a staffing agency, you run the risk of being deemed a joint employer even though you wanted to bypass these restrictions when you hired temp workers. If you own a staffing agency, you have to be concerned that this new ruling will have a chilling effect on businesses who would no longer see the benefit of hiring workers from you. Finally, if you are an independent contractor, you get the benefit of more workers’ rights but this may come at the cost of more limited job opportunities.
On the other hand, as Stacy Cowley explains, this NLRB ruling is very narrow and only focuses on the workers’ ability to unionize and negotiate directly with either (a) the businesses that hire these workers from staffing agencies or (b) the franchise owners (i.e. franchisor instead of being limited to negotiating with the franchisees who operate on a tiny budget). Essentially, their bargaining rights just got expanded. However, despite similar rulings in the past, most workers have declined to exercise this option. The bigger concern for you as a business owner, is that this might be just the beginning of even more expansive employee rights for temp workers. As such, you need to find out how to insulate yourself from being deemed a joint employer.
Though it is not 100% clear, it seems that you, as a business owners can try to shield yourself from this new rule by minimizing the level of control you exercise over your contractors (or franchisee employees). You should focus on the fact that the job you desire gets done but have minimal say over “how” it was done. If you are a freelancer, just be aware of your new rights and only you can decide if and when you want to exercise them.
For everyone, here’s an infographic to remind you all about the differences between an employer and contractor.
