On Thursday, the National Labor Relations Board (NLRB) announced rulemaking that officially restores the 2020 standard for determining if two businesses are considered “joint employers.” This decision comes after the U.S. District Court for the Eastern District of Texas struck down a different rule from 2024. As a result, the NLRB is returning to the earlier standard set during the first Trump administration, which states that a company is only a joint employer if it has and exercises substantial, direct, and immediate control over key aspects of employment for another company’s workers. Since the NLRB has been following this standard for a while, there will be no immediate changes. However, ongoing litigation is expected as courts continue to review this standard’s validity.
The U.S. Department of Labor on Thursday proposed a new rule to differentiate between employees and independent contractors. Entitled the “Employee or Independent Contractor Status Under the Fair Labor Standards Act, Family and Medical Leave Act, and Migrant and Seasonal Agricultural Worker Protection Act,” the proposed rule would establish a standard similar to one the DOL issued under the first Trump administration. Similar to the previous standard, the new rule seeks to make worker classification simpler by emphasizing two primary factors: control over the work and entrepreneurial opportunity. Although aspects such as the required skill level and how long the relationship lasts still matter, they are often not needed if the main two factors lead to the same conclusion.