The NLRB (National Labor Relations Board) recently decided that a company whose workers were supplied by an employee leasing company is a "joint employer" because they have the potential to exercise control over those workers' wages and working conditions. The impact of this decision is far-reaching, as many employers have turned to employee leasing companies to avoid responsibility for workers such as reporting wages and employment taxes.Employee leasing is a contractual arrangement where the leasing company is the official employer of the "leased workers." The leasing company then leases these workers to the business for a price agreed to in the contract. The leasing company is then responsible for managing compliance with state and federal regulations, payroll, unemployment insurance, workers' compensation insurance, and other paperwork.
Up until the recent decision, the NLRB's test to determine who the official employer was centered on who had "direct and immediate" control over the workers. Under that test, the employee leasing company would be considered the official employer, and would be the one responsible for negotiating with the workers' union. With the new decision by the NLRB, the union will now be able to collectively bargain with the business owner who leases them from the leasing company.
While Florida is a right to work state, meaning you can not be required to join a union or pay dues as a condition of your employment, and therefore has a very weak union presence, the impact of this decision is still far reaching. The NLRB now treating the business owner as the employer of leased workers, only requiring the potential to exercise control, shows a positive trend in removing the business owners' ability to avoid liability or responsibility by simply pointing to the leasing company as the one responsible. Removal of this ability will lead to better working conditions for all workers as the business owner will no longer be able to effectively control the working conditions and simultaneously avoid responsibility for those decisions.
Controversial NLRB Ruling Could End Contract Employment As We Know It