In September, the federal agency published formal notice of intent to revise its joint employer standard, which went into effect in 2020.
- Under the 2020 rule, an entity can be considered a joint employer of another employer’s workers only if it and the other employer share or jointly determine the essential terms of employment, such as wages, hiring and discipline.
- The revision would consider businesses to be employers not just of their employees, but of temporary workers and independent contractors as well.
Why it’s important: The proposed revision “would lead to significant disruptions in manufacturing operations,” NAM Director of Labor and Employment Policy Brian Walsh said. “Further, it would exacerbate manufacturers’ ability to respond to changing market demands, including efforts to address acute workforce needs.”
- If the change is enacted, manufacturers that use staffing firms to fill worker shortages—still a significant challenge in the industry—would be made responsible for workers “they did not hire and are working with temporarily,” Walsh said.
- Furthermore, it would “create new tensions and complications” in the organized labor landscape.
A safety hazard: If enacted, the new rule would challenge a company’s ability to release workers who violate workplace rules.
- It would also impede companies’ ability “to provide basic safety training to workers or take action to address health and safety threats as they arise, such as during the COVID-19 pandemic,” Walsh said.
The final word: The proposed rule “will harm manufacturers at a time when they need the flexibility and contingency offered through temporary and contract workers,” Walsh said. “These personnel help manage supply chain impacts, demand for manufactured products and other inflationary challenges.”