On February 26, 2026, the National Labor Relations Board (NLRB) officially withdrew the 2023 Biden-Era joint employer final rule that broadens the NLRB's definition of “employer”. NLRB’s new final rule reinstates the 2020 Trump-era joint employer final rule, which requires companies to have substantial direct and immediate control over another employer’s workers to be considered joint employers. If companies are deemed joint employers, both have a duty to bargain with the employee’s union, both are potentially liable for unfair labor practices, and both are subject to union picketing or other economic pressure if there is a labor dispute. With the 2020 Rule formally reinstated, potential exposure for companies under the National Labor Relations Act is significantly decreased.
The Biden-Era joint employer final rule could potentially increase liability and exposure for long term care centers if they utilize staffing agency or contract workers. Previously, the Biden employer final rule was vacated by the District Court for the Eastern District of Texas in March 2024. AHCA/NCAL applauded the Court’s decision and joined a coalition letter in February 2024 urging legislators to support a Congressional Review Act resolution to nullify the rule. More details on the case can be found on the U.S. Chamber’s website.
While the 2020 rule from President Trump’s first term was already effectively back in place due to the court ruling noted above, the NLRB’s final rule formally reverts back to it. This rule went into effect February 27, 2026.
On the same day the NLRB released its final rule, the U.S. Department of Labor (DOL) released a proposed rule rescinding the current independent contractor standard and returning to a more business-friendly test. In the agency’s news release, DOL noted the proposed rule would make it easier to properly differentiate between employees with the protections under the Fair Labor Standards Act and those workers who work as independent contractors. Comments on the proposed rule are due on April 28, 2026.
What should employers do? Employers should review their staffing, contracting, and worker classification practices to ensure they are fully compliant with the latest standards and may wish to comment on the DOL proposed rule. AHCA/NCAL will keep its members informed of any relevant updates.