In an Aug. 27 ruling against the waste management firm Browning-Ferris, the National Labor Relations Board (NLRB) redefined the employee-employer relationship, making it harder for companies with franchises and independent contractors to avoid offering protections and benefits. It will also give unions more negotiating power and make contracting companies more vulnerable to legal action.

In the decision, the board determined that Browning-Ferris should be considered a “joint employer” with a staffing agency contracted to support its California recycling facility. Under this new status, the company could be pulled into collective bargaining negotiations or held liable for labor violations committed by the direct employer.

For repair stations that contract services – from janitorial support to food service – joint employer status would mean additional litigation, employee unionization and the use of “economic weapons” such as pickets and protests. Before the NLRB ruling, companies using contracted services were insulated from such hazards. If left unaddressed, the new standard could place companies in danger of these labor issues whenever they have indirect or unexercised potential control over a contract employee.

Updating white-collar exemption
In other labor news, the Department of Labor (DOL) requested comments on its proposed rule to extend overtime protection to millions of white collar workers. A final rule is expected in 2016.

Currently the Fair Labor Standards Act requires a two-part test to exempt an employee from overtime pay. To qualify, the employee must earn $23,660/year and pass the “duties test” to determine if their job is “white collar.” The new proposal increases the salary threshold to $50,440/year with a built-in annual increase and requests feedback on the duties test in its current form.

Learn more about the DOL’s proposed changes to overtime pay eligibility and click here to submit comments by Sept. 4.

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