A decision by the National Labor Relations Board announced that franchisors and companies using staffing agencies can be considered is expected to have a significant impact on companies that use staffing agencies to reduce their headcount and avoid some requirements for the Affordable Care Act.
The 3-2 decision involved Browning-Ferris IndustriesCalifornia. It contracted with Leadpoint Services to supply employees to sort and screen items at a recycling plant. A union sought to
represent the Leadpoint workers as employees Browning-Ferris.
Following NLRB precedents, a regional official of the agency ruled that the workers were solely employed by Leadpoint. The union requested a review of the decision.
Labor organizations, legal scholars and the agency’s own general counsel urged the NLRB to revise its standards for assessing - status. argued that the standard, established in 1982 in a case that also involved Browning-Ferris, should continue.
The NLRB decided that its past policies were “out step with changing economic circumstances.” The majority opinion the board said that two or more entities are a single workforce if (1) they are both within the meaning common law; and (2) they share or co-determine terms and conditions employment.
In evaluating whether an has enough control over employees to qualify as a , the NLRB – and presumably the , when looking at issues – therefore will look at whether an exercises control over the terms and conditions employment indirectly through an intermediary, or whether it has reserved the authority to do so.
The NLRB’s decision is expected to have broad effects, including related to the . A company with fewer than 50 direct employees that also uses workers from a staffing agency may now have to include those workers in its count -- employees.