Following significant advocacy efforts by NMHC/NAA, the House passed legislation on November 8 to overturn the National Labor Relation Board’s (NLRB) joint employer rule - an important priority for the apartment industry The Save Local Business Act would rectify the NLRB rule by restoring the requirement that employers must have direct and immediate control over the essential terms and conditions of employment. Apartment firms would not be liable for fines resulting from employees of suppliers who violate Federal labor laws.
NMHC/NAA have long supported overturning the joint employer rule. On November 6, NMHC/NAA joined with a number of employer and business trade associations in sending a coalition letter to Congressional leaders urging them to pass legislation doing away with the unnecessary rule. Further, in early October, the multifamily industry sent a letter of support to the House Education and the Workforce Committee supporting the Save Local Business Act.
As background, in 2015 the NLRB significantly expanded the definition of joint employer in its Browning-Ferris Industries of California decision. This potentially made apartment firms liable for the actions of their subcontractors, suppliers, vendors and temporary staff.
Joint employer scenarios occur when the supervision of an employee’s activity is shared between two or more businesses. The NLRB ruled that it could impose joint employer liability when an entity has “indirect” control and “unexercised potential” of control over another entity’s employees. This would have been a significant change from three decades of business practices where entities were designated joint employers when both had “direct and immediate” control over “essential terms and conditions of employment.”