Previous Trump-era rule exposed millions of workers to harmful and unfair labor practices
HARRISBURG — Attorney General Josh Shapiro, in a comment letter filed today, urged swift action on a new federal proposal aimed at better protecting workers and ensuring greater accountability in the workplace. AG Shapiro joined his fellow attorneys general in supporting the National Labor Relations Board’s (NLRB) proposed rule regarding standards for determining whether an entity qualifies as a joint employer. The NLRB’s current proposal would rescind and replace a 2020 final rule that took effect during the Trump Administration, which unlawfully shielded companies from liability and exposed millions of workers to harmful and unfair labor practices. In contrast, the current proposal seeks to hold companies accountable and returns the joint employer standard to one that better reflects contemporary employment relationships in the 21st century.
“Whenever companies use subcontracting and other outsourcing arrangements to cut costs, but control or reserve the ability to control those workers, they must share in the responsibility for violations of employees’ rights,” said AG Shapiro. “The joint employer standard that the NLRB has proposed will ensure that these companies won’t be able to hide behind those arrangements and will be held accountable. I will always fight for the rights of workers in Pennsylvania to organize and exercise their rights guaranteed by law.”
In today’s economy, joint employer relationships are common. Joint employment frequently involves workers who, while directly employed by a subcontractor, ultimately perform work for the benefit of a larger company. For example, corporations have trended toward outsourcing large subsets of their workforce, such as janitorial and security services. In addition, the COVID-19 pandemic has resulted in staffing shortages in many sectors such as healthcare and logistics. This in turn may increase demand for temporary workers, who are typically hired by temporary staffing agencies and assigned to a company. These companies may outsource whole functions of their businesses to downstream agencies in an attempt to cut costs. But these companies often still reserve or exercise control over the downstream company’s employees, whether directly or indirectly, and thus, must share liability for violations of those employees’ rights under labor and employment laws.
Accordingly, the joint employer standard, when appropriately defined, is incredibly important for ensuring accountability and protecting against violations of workers’ rights. The Trump-era rule significantly narrowed the circumstances in which an entity that exercised control over workers could be held legally accountable for federal labor law violations. The current NLRB proposal instead ensures fairness in the workplace and reaffirms that indirect control over essential terms and conditions of employment must be considered in determining joint employer status. Joint employer liability is critical to driving compliance with employment laws. Upstream companies generally exercise greater power to effectuate broader compliance, either through subcontractors or as a result of their influence and stature in the industry. As a result, holding upstream companies accountable as joint employers has pronounced compliance effects that reverberate throughout an industry.
In the comment letter, attorneys general further assert that the proposed rule:
- Is consistent with the statutory purpose of the National Labor Relations Act;
- Provides certainty to the public about the NLRB’s joint employer standard by making it consistent with common law;
- Offers greater guidance regarding the relevance of indirect control; and
- Complies with the Administrative Procedure Act.
A copy of the comment letter is available here.
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