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Highlights
Impacted Employers:All employers
Effective Date:February 27, 2026
Summary:The National Labor Relations Board has published a final rule that revises its regulations to officially remove a joint-employer test issued in 2023 and replace it with a prior version of the test.
Next Steps:Review the joint-employer test and consult legal counsel if you have questions about your business relationships with other entities.
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The Details
The National Labor Relations Board (NLRB) has published a final rule that revises its regulations to officially remove a joint-employer test issued in 2023 and replace it with a previous version of the test.
Background
The National Labor Relations Act (NLRA) entitles employees to work together to seek better wages and working conditions and to designate representation without employers retaliating against them. The NLRB enforces the NLRA.
In October 2023, the NLRB published a final rule that replaced the standard for determining joint-employer status under the NLRA. When two entities are joint employers, both may be considered responsible for complying with the NLRA and adhering to collective bargaining rules, and both may be held liable for failing to do so.
The 2023 version of the joint-employer test considered an entity’s authority to control essential terms and conditions of employment, regardless of whether such control is exercised, and without regard to whether any such exercise of control is direct or indirect.
In 2024, a federal judge issued an order vacating the 2023 version of the joint-employer test.
As such, a 2020 version of the joint-employer test has applied, but the NLRB hadn’t updated its regulations to reflect this until recently.
2026 Final Rule
On Feb. 27, 2026, the NLRB published a final rule that revises its regulations to officially replace the court-vacated test with the 2020 version of the test.
The 2020 version sets a higher bar for proving a joint-employer relationship exists by requiring that the entity exercise “substantial direct and immediate control” over essential terms and conditions of employment.
Under the latest revision to the regulations:
- An employer may be considered a joint employer of a separate employer's employees only if the two employers share or co-determine the employees' essential terms and conditions of employment.
- To establish that an entity shares or codetermines the essential terms and conditions of another employer's employees, the entity must possess and exercise such substantial direct and immediate control over one or more essential terms or conditions of their employment as would warrant finding that the entity meaningfully affects matters relating to the employment relationship with those employees.
- Substantial direct and immediate control means direct and immediate control that has a regular or continuous consequential effect on an essential term or condition of employment of another employer's employees. Such control is not “substantial” if only exercised on a sporadic, isolated, or de minimis basis.
- Evidence of the entity's indirect control over essential terms and conditions of employment of another employer's employees, the entity's contractually reserved but never exercised authority over the essential terms and conditions of employment of another employer's employees, or the entity's control over mandatory subjects of bargaining other than the essential terms and conditions of employment 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 over a particular essential term and condition of employment.
Review the text of the final rule for details.
Next Steps
Review the joint-employer test and consult legal counsel if you have questions about your business relationships with other entities.