NLRB Reinstates 2020 Joint Employer Rule

On Feb. 26, 2026, the National Labor Relations Board (NLRB) announced a final rule reestablishing the 2020 joint employer rule for determining joint-employer status.

The final rule was published in the Federal Register on Feb. 27, 2026, and took effect immediately.

Background

Joint-employment situations can happen when two or more employers share personnel hiring, supervision and management practices. When a joint-employment status exists, joint employers are equally responsible for compliance with applicable laws and regulations.

On Oct. 27, 2023, the NLRB published a final rule that established new criteria for determining joint-employer status as applied to labor issues under the National Labor Relations Act. The 2023 joint employer rule would have rescinded the existing 2020 joint-employer standard and replaced it with a more inclusive law, making it easier for employers to be classified as joint employers.

Originally, the final rule was to become effective on Dec. 26, 2023. However, the rule’s effective date was extended several times, most recently to March 11, 2024. On March 8, 2024, the U.S. District Court for the Eastern District of Texas vacated the final rule. Then, on May 7, 2024, the NLRB appealed the decision to the U.S. Court of Appeals for the 5th Circuit. However, on July 19, 2024, the NLRB voluntarily dismissed its appeal to allow it time to consider issues raised by the Eastern District of Texas’ decision and options for addressing outstanding joint-employer matters. As a result, the 2020 joint-employer rule remained in effect.

Key Highlights

The NLRB announced that it is revising its rules and regulations to replace the vacated regulatory text of the 2023 joint employer rule with the 2020 joint employer rule that remained in effect due to the vacatur. The final rule is to take effect immediately.

The final rule considers the “substantial direct and immediate control” employers have over the essential terms and conditions of employment for individuals employed by another organization. Specifically, the final rule indicates that a business is a joint employer of another employer’s employees only if the degree of control is of sufficient magnitude to conclude that the joint employer meaningfully affects matters relating to the employment relationship. In addition, under the final rule, other evidence may suggest (but not prove) the existence of joint-employer status, particularly when it points to indirect control or the right to exert control through contract or agreement, even when control is never exercised.

Employer Takeaway

The final rule replaces the vacated 2023 joint employer rule with the 2020 joint-employer standard. However, employers should have been relying on the 2020 joint-employer standard to determine whether joint employment exists since the U.S. District Court for the Eastern District of Texas’ 2024 ruling.