NMHC/NAA continues to push for a resolution to the 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, a regulation that NMHC/NAA have long argued against because it would hold firms, including apartment firms, liable for fines if their subcontractors, suppliers, vendors and temporary staff violated Federal labor laws. The NRLB reversed course to reinstate the rule following an Inspector General report concluding that Board Member William Emanuel should have been disqualified from participating in the original proceeding.
Joint employer scenarios occur when the supervision of an employee’s activity is shared between two or more businesses. 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.”
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.
NMHC/NAA have long supported overturning the joint employer rule. On February 15, 2018, and November 6, 2017, the industry joined with a number of employer and business trade associations in sending coalition letters 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.