A new draft rule issued by the National Labor Relations Board on Tuesday lays out “unforgiving” standards for joint employment that could redefine how nursing homes and others work with third-party hiring agencies.
The revised standards, the board’s fourth recent attempt to settle joint employment law, could make it easier for workers connected with staffing firms, franchises or other alternative placement companies to both organize and sue as individuals, observers said Tuesday.
Instead of having to have direct control over workers, companies would be defined as joint employers if they work together or could work together to set wages and benefits. That makes many nursing home providers, still finding themselves reliant on temporary workers, vulnerable if the proposed rule is eventually finalized.
“Healthcare is going to be one of those industries that has more than its share of risk factors because the joint staffing model is a very familiar one,” said Steven Bernstein, a Tampa-based regional managing partner with Fisher Phillips. “This rule is not coming down in a vacuum. It needs to be viewed against the backdrop of changing staffing models, many of which were accelerated by COVID-19.”
Standards for joint employment have shifted back and forth over the last decade, blown askew by shifting political winds. The Biden administration has proven itself labor-friendly, and this latest proposal is no exception.
The draft did not set a date for final adoption; comments will remain open for at least 60 days.
“The Board believes that establishing a definite, readily available standard will assist employers and labor organizations in complying with the [National Labor Relations] Act,” the board said in a draft posted for inspection Tuesday morning.
“The Board also seeks to establish a rule regarding joint employers’ bargaining obligations and potential unfair labor practice liability that correctly reflects both background legal principles and the National Labor Relations Act’s public policy of ‘encouraging the practice and procedure of collective bargaining’ and maximizing employees’ ‘full freedom of association, self-organization, and designation of representatives of their own choosing, for the purpose of negotiating the terms and conditions of their employment or other mutual aid or protection,’” the draft states.
Non-union facilities at risk
Beyond potentially strengthening bargaining rights, joint employment status is important because corporations that co-employ can both be sued over working conditions, pay and overtime, and protections such as child labor laws. Bernstein sees the latest, more expansive interpretation as potentially dangerous to nursing homes without unions; its wider scope could allow individual workers to seek investigation and prosecution of labor violations, he told McKnight’s Long-Term Care News Tuesday.
The National Employment Law Project explains that a broader joint-employment standard “shifts the balance of power toward agencies with a strong track record of compliance with labor and employment laws. Corporations that use staffing agencies will be more likely to set up procedures that detect their staffing agencies’ illegal labor practices.
“Conversely, when a corporation is not its temp workers’ employer, it can treat these workers as nothing more than a line-item expense in its budget, pit staffing agencies against each other to drive down labor costs, and ignore the illegal labor practices and exploitation that may result,” the pro-labor group writes on its website.
That potential downside of tighter labor regulations will likely combine with ongoing agency costs to further push providers to winnow their use of temporary nurse staffing, said labor and employment attorney Adam Santucci of Pennsylvania-based McNees, Wallace and Nurick. He suggested providers start to reconsider their dependency now.
“If you can’t get an agreement with good terms for a staffing agency that protects against this joint employer consideration, then you’re not going to use them because the risks are going to be such that it’s not worth it,” Santucci told McKnight’s. “Take a real hard look and make an assessment about where you need to change those relationships now to address that potential risk.”
Decades of back and forth
An Aug. 1 court decision precipitated the latest approach from the NLRB, one that Fisher Phillips experts predicted would “be unforgiving to those employers participating in alternative staffing arrangements.” Bernstein was reluctant to say whether the version revealed Tuesday was worse than expected, noting that the devil will be in the final details and in how the rule is enforced after adoptions.
In its draft, the board said that it would use public comments to broaden “a set of essential terms and conditions of employment to ensure that the joint-employer standard can encompass changing circumstances in the workplace over time, as well as the particularities of certain industries or occupations.”
Its proposal rule would rescind an existing 2020 rule largely seen as pro-business, and replace it with the new, broader interpretation that builds on common law dating to the 1930s.
The board also asked for comment from employees, unions and employers experienced with joint employment by Nov. 7, 2022. Comments replying to comments submitted during the initial comment period must be received by Nov. 21.
Bernstein urged providers that use outside labor to begin reviewing their contracts sooner rather than later and to consider removing extraneous language that shows potential to control a joint employee, particularly if the company never exercises that right.
