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NMHC has long supported policy and legislation that clarifies joint employment only when an employer directly, actually and immediately exercises significant control over the essential terms and conditions of employment.
Read on for the latest legislative, regulatory and industry actions related to this topic.
NMHC Pushes Back on Proposed Joint Employer Rule
NMHC joined a diverse group of business interests on a letter pushing back against the Joint Employer proposed rule released earlier this year. This rule was released after the Biden Administration negated a similar effort supported by NMHC under the Trump Administration.
- What This Means/Industry Impact The rule seeks to establish an unworkably vague framework for employment agreements, exposing multifamily developers, managers, and others to liability regarding a variety of labor and collective bargaining matters.
- NMHC's Viewpoint: NMHC believes the rule as currently drafted is unworkable and will communicate our concerns to the Administration and Congress until the next iteration of the rule is released.
- What Now: The National Labor Relations Board will review all submitted comments in the coming months, and determine whether to revise and finalize, or revise and re-release the rule.
Learn More: Click here to access the statement from the Coalition for a Democratic Workplace NMHC joined.
NMHC Voices Opposition to PRO Act as Senate Considers Legislation
NMHC joined a coalition of other organizations on July 22 in sending a letter to Senate Health, Education, Labor and Pensions (HELP) Chair Patty Murray (D-Wash.) and Ranking Member Richard Burr (R-N.C.) in opposing the Protecting the Right to Organize (PRO) Act of 2021.
- What This Means/Industry Impact: While the House approved the PRO Act on March 9, the companion version introduced in the Senate is unlikely to clear that chamber in its entirety. Democrats would like to see the PRO Act included in a reconciliation bill on human infrastructure. However, all provisions in a reconciliation bill must have a budgetary impact, meaning the current version of the bill is likely to be narrowed.
Learn More: Read our coalition letter >>>
House Passes PRO Act to Codify Joint Employer Standard
The House on February 6 voted to approve legislation that would codify the joint employer standard that the National Labor Relations Board (NLRB) enacted in 2015.
- What This Means/Industry Impact: While the full House has approved the PRO Act, the companion version introduced in the Senate is unlikely to clear that chamber. The Trump Administration also issued a veto threat on this legislative proposal.
- NMHC's Viewpoint: NMHC and NAA have been very active on this issue. In addition to weighing in on the Department of Labor’s (DOL) final rule, we have long opposed the NLRB’s decision because it could hold firms liable for fines if their subcontractors, suppliers, vendors and temporary staff violated Federal labor laws. The multifamily industry is hopeful that the NRLB will quickly finalize proposed regulations to overturn the rule.
Learn More: DOL has provided a list of FAQs regarding how the final joint employer rule would apply: https://www.dol.gov/agencies/whd/flsa/2020-joint-employment/faq
DOL Issues Final Joint Employer Rule
The Department of Labor (DOL) on January 12 issued a final rule governing when two entities are considered joint employers and liable for an employee’s wages under the Fair Labor Standards Act (FLSA).
- What This Means: According to the DOL, “whether an individual or entity is an FLSA joint employer will depend on all the facts in a particular case, and the appropriate weight to give each factor will vary depending on the circumstances. However, the final rule specifies that the potential joint employer’s maintenance of the employee’s employment records alone will not lead to a finding of joint employer status.”
- NMHC's Viewpoint: NMHC and NAA commented favorably on the proposed version of the rule on April 29. The final rule will be effective March 16, 2020.
Learn More: DOL has provided a list of FAQs regarding how the final joint employer rule would apply: https://www.dol.gov/agencies/whd/flsa/2020-joint-employment/faq
NMHC Opposes PRO Act that Would Codify Joint Employer Standard
The House Education and Labor Committee on September 25 voted 26-21 to approve legislation that would codify the joint employer standard that the National Labor Relations Board (NLRB) enacted in 2015.
- What This Means/Industry Impact: The NLRB’s decision because would hold firms liable for fines if their subcontractors, suppliers, vendors and temporary staff violated Federal labor laws.
- NMHC's Viewpoint: While the full House is expected to consider the PRO Act this Congress, it is unlikely to pass the Senate. However, NMHC is working with the Coalition for Democratic Workplace (CDW) on efforts to oppose this legislation.
Learn More: Read our comment letter here >>>
NMHC and NAA Signify Support for Proposed DOL Joint Employer Rule
NMHC and NAA commented favorably on a proposed Department of Labor (DOL) rule governing when two entities are considered joint employers and liable for an employee’s wages under the Fair Labor Standards Act (FLSA) on April 29.
Learn More: Read the NMHC and NAA comment letter here >>>
DOL Issues Proposed Rule Regarding Joint Employers
The Department of Labor (DOL) on April 1 issued a proposed rule governing when two entities are considered joint employers and liable for an employee’s wages under the Fair Labor Standards Act (FLSA). The FLSA requires employers to pay at least the minimum wage and overtime to non-exempt employees who work in excess of 40 hours in a week.
- What This Means: In the first meaningful update to joint employer regulations since 1958, DOL is proposing a four-factor test that would determine whether employers are joint employers. The test would consider whether the potential joint employer actually exercises the power to:
- hire or fire the employee;
- supervise and control the employee’s work schedules or conditions of employment;
- determine the employee’s rate and method of payment; and
- maintain the employee’s employment records.
- NMHC's Viewpoint: NMHC and NAA believe this proposed test would provide clear rules of the road governing joint employment situations that could arise in the multifamily industry.
Learn More: DOL has provided a list of FAQs and examples illustrating how the proposed joint employment rule would apply: https://www.dol.gov/whd/flsa/jointemployment2019/joint-employment_faq.htm
NLRB Reinstates Joint Employer Rule
On February 26, the National Labor Relations Board (NLRB) voted 3-0 to vacate a December 2017 ruling that overturned the Obama-era joint employer rule following an Inspector General report concluding that Board Member William Emanuel should have been disqualified from participating in the original proceeding.
- What This Means: Given that there is not currently a majority of NLRB members to reverse the joint employer rule, the apartment industry is urging Congress to act legislatively. Following significant advocacy efforts by NMHC/NAA, the House passed legislation in November 2017 to overturn the joint employer rule. 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.
- Industry Impact: We’re back to square one. As referenced in our November 2017 update below, The NLRB’s ruling means that it can impose joint employer liability when an entity has “indirect” control and “unexercised potential” of control over another entity’s employees. This is a significant change from three decades of business practices applicable prior to its original 2015 ruling in Browning-Ferris Industries of California where entities were designated joint employers when both had “direct and immediate” control over “essential terms and conditions of employment.”
- NMHC's Viewpoint: Given this turn of events, NMHC plans to pursue legislative action to ensure a resolution.
Additional Updates
House Overturns Joint Employer Rule
The House passed legislation on November 8 to overturn the National Labor Relation Board’s (NLRB) joint employer rule
- What This Means: This significant industry win comes after tireless NMHC advocacy (see below for more). This legislation will now move to the Senate.
Learn More: Read NMHC’s November 6 coalition letter to Congressional leaders urging them to pass legislation doing away with the unnecessary rule and our October letter in support to the House Education and the Workforce Committee supporting the Save Local Business Act.
NMHC Urges House to Overturn Joint Employer Rule
NMHC and NAA joined with a number of employer and business trade associations this week in sending a coalition letter to Congressional leaders imploring them to pass legislation to overturn the National Labor Relation Board’s (NLRB) joint employer rule.
- What This Means: The coalition called on Congress to support H.R. 3441, the Save Local Business Act, which 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 should not be liable for fines resulting from employees of suppliers who violate Federal labor laws.
- Industry Impact: 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 is 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.”
- NMHC's Viewpoint: NMHC and NAA have long supported overturning the joint employer rule. 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. The Committee approved the legislation on October 4 and sent it to the full House for consideration.
