The New Jersey Employment Law Firm Blog
To assert a claim for violations of New Jersey employment laws, a person must be able to demonstrate that an employer-employee relationship exists. State and federal employment statutes tend to provide vague definitions of terms like “employee” and “employer.” Courts and regulatory agencies provide more detailed definitions. For example, the New Jersey Supreme Court has adopted a test to distinguish between employees with the full protection of state and federal employment law and independent contractors with contractual rights and remedies. In other situations, multiple entities may exercise control over an employee’s work, making it difficult to determine who is their “employer” under the law. The National Labor Relations Board (NLRB) recently issued a new rule for determining when an employee has “joint employers.” The rule can help employees hold employers liable for violations of federal labor law.
The National Labor Relations Act (NLRA) protects employees’ rights to “self-organization” and “other concerted activities” intended to protect employees or promote their welfare. Employers may not threaten or interfere with employees who are engaging in protected activities. The NLRB investigates claims of unlawful activity by employers.
“Joint employer” status can be an issue in situations where more than one company or other entity has some degree of control over an employee’s work. An employee might draw a paycheck from a staffing agency, for example, but take orders from a business that contracts with the agency. Someone who works for a business that operates a franchise might be subject to requirements from their direct employer, known as the franchisee, and the franchisor. The joint employer rule seeks to determine how many entities are acting as an “employer.”
The NLRB issued a final joint employer rule that took effect in 2020. After the current administration took over the White House in 2021, the NLRB began work on revising that rule, resulting in the new rule published in the Federal Register in October 2023. The new rule only applies to administrative proceedings under the NLRA. Other agencies may establish their own joint employer rules. The Wage and Hour Division of the U.S. Department of Labor, for example, issued a joint employer rule for the Fair Labor Standards Act in early 2020. It rescinded that rule effective September 28, 2021, and has not yet issued a new proposed rule.
The NLRB’s new joint employer rule took effect on December 26, 2023. It is more favorable to employees than the previous rule, in the sense that it takes a broader view of the definition of “employer.” The key factor is an entity’s influence over the “essential terms and conditions of employment” (ETCE), which includes matters like compensation, benefits, hours of work, job duties, supervision, rules and discipline, hiring and firing, and workplace safety.
An entity is a joint employer if it “share[s] or codetermine[s]” ETCE for another entity’s employees. The earlier rule required evidence that an entity actually exercised direct control over ETCE. The new rule may allow a finding of joint employer status if an entity has the authority to control ETCE, even if it has never done so.
If you believe that your employer has caused you harm by violating state or federal law, you need a knowledgeable employment lawyer to guide you through the process of asserting your rights. The Resnick Law Group represents New Jersey and New York workers in claims for wage and hour violations, discrimination, and other unlawful employment practices. Please contact us online, at 973-781-1204, or at 646-867-7997 today to schedule a confidential consultation to see how we can assist you.