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NLRB Ruling: What companies should know

Posted on Wednesday, September 07, 2016

Time & Attendance Software | NLRB Ruling You Should Know | Time Rack

Over the course of President Barack Obama's time in office, there have been many rulings handed down that have changed how employees are treated in the workforce.

While the Affordable Care Act is perhaps the most well known, the National Labor Relations Board's August 2015 decision to alter the definition of joint-employer status shouldn't be overlooked.

Let’s take a closer look at the independent agency's conclusion and what it means for organizations:

The NLRB recently decided to alter the definition of a joint employer.The NLRB recently decided to alter the definition of a joint employer.

The cause of the resolution
Many companies hire outside help – known as independent contractors – to complete certain tasks. Since these employees were not under the direct control of the organization, the employer could not set job responsibilities, hours or wages. As a result, the workers were not eligible for the same protections as regular, full-time employees.- thus requiring less in-house obligation for the company.

The case that brought this issue to the forefront was one involving a waste management firm that used a staffing agency to staff one of its facilities. The question at hand was whether the employer was responsible for treatment of the employees or if that responsibility was up to the other party.

The NLRB ruled that the two companies should be considered joint-employers, meaning the waste management firm could be held liable for labor violations against the independent contractors and can be pulled into collective bargaining negotiations as well, according to The Hill.

“Companies may stop using staffing agencies as a result of the NLRB's ruling.”

Effects on employers
This alteration could seriously change ways in which companies choose to run their operations. Many will opt to cut ties with staffing agencies – especially franchise businesses – to avoid additional employee responsibility, including provision of benefits and compliance with other labor standards. Instead, these organizations will move more of their formerly outsourced tasks to members of their in-house team as a means of establishing greater control.

Those organizations that decide to continue utilizing assistance from other businesses will have to amend how they interact with and treat their workers, as the joint-employer status requires greater attention to detail to ensure people are taken care of under state and federal regulations.

The newest NLRB ruling
The NLRB has continued to tackle important cases as temporary employees attempt to gain more ground and earn comprehensive rights. The agency ruled that these part-time workers – including temps and graduate student assistants – can join unions and other bargaining a means of improving their working situations.

Keeping up with these decisions can be challenging for employers concerned with compliance. Time Rack offers companies the time and attendance software needed to manage changes in regulations and standards. With customizable and scalable systems, organizations can add workers as needed and ensure their wage and hour rules adhere to those set forth by federal agencies.

The Payroll Vault Annual Conference that was held Aug. 31 through Sept. 2 in Centennial, Colorado featured a helpful session detailing recent legislative updates businesses should be aware of, including NLRB alterations. Time Rack attended the event, offering executives insight and experience in fields, including staffing, compliance with important regulations and much more.

Contact us to learn more about the NLRB's altering the definition of joint-employer status