NLRB Updates
2020 Joint Employer Rule is Officially Reinstated
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APPLIES TO All Employers Subject to the NLRA |
EFFECTIVE FEB 27, 2026 |
QUESTIONS? Contact HR On-Call |
Quick Look
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Discussion
With each administration change at the National Labor Relations Board (NLRB), its joint employer rule has fluctuated between the requirement for direct or indirect control over employees’ terms and conditions of employment. The previous 2020 Rule moved away from the broader test that included indirect control as a potential determination of joint employer status, and instead focused on a narrower direct control test. The subsequent 2023 Rule reinstated a version of the broader test that looked at indirect control, but was subsequently vacated on March 8, 2024 by the U.S. District Court for the Eastern District of Texas as being overly broad. Even though the 2023 rule never officially was enforced due to legal challenges, which meant that the 2020 rule remained in effect, the NLRB has now issued a final rule officially reinstating the 2020 rule.
Specifically, joint employer status is determined when two employers “share or codetermine the employees’ essential terms and conditions of employment.” Employers must exercise “substantial direct and immediate control” over one or more essential terms or conditions of their employment, including wages, benefits, hours of work, hiring, discharge, discipline, supervision, and direction. “[C]ontrol is not ‘substantial’ if only exercised on a sporadic, isolated, or de minimis basis.”
Additionally, evidence of indirect control or a contractual right to control but never exercised is “probative of joint employer status,” but only to the “extent it supplements and reinforces evidence of the entity’s possession or exercise of direct and immediate control.”
Finally, each relationship must be analyzed on a case-by-case basis based on their particular circumstances. The burden of proof is on the party claiming joint employer status. While this reinstated rule doesn’t necessarily change current enforcement, employers should still have their joint employer relationships reviewed by legal counsel for potential liability.
Action Items
- Have joint employer relationships reviewed by legal counsel.
Updated NLRB Case-Handling Guidelines
On February 27, 2026, the NLRB General Counsel issued Memo GC 26-03 outlining updated procedures for handling cases. The memo confirms that all prior guidance from former Acting General Counsel Cowen remains in place, including earlier rescissions and the decision not to revisit certain past Board cases. As part of the update, the Office is currently reviewing open cases and removing any allegations or arguments that no longer apply. The memo also directs regional offices to approve settlements when both parties agree on lawful terms. Stronger remedies, like notice readings, apology letters, or nationwide notices, should only be used in serious or repeat‑violation cases, not as a standard practice. In addition, regions are told to stop prioritizing cases that rely only on the existence of a questionable workplace rule, unless there is evidence that the rule was enforced or that it harmed employees. If an employer agrees to fix the rule, the case should be settled or dismissed. Finally, the memo provides more detailed expectations for how regions should gather evidence going forward.
Disclaimer: This document is designed to provide general information and guidance concerning employment-related issues. It is presented with the understanding that ManagEase is not engaged in rendering any legal opinions. If a legal opinion is needed, please contact the services of your own legal adviser. © 2026 ManagEase