Today's Technology for Tomorrow's Firm.
Issue link: https://cpapracticeadvisor.epubxp.com/i/588168
32 October 2015 • www.CPAPracticeAdvisor.com FEATURE Specifcally, the majority changed t he test for deter m i n i ng who a n "employer" of a particular worker is, op e n i n g u p e mploy e r s w ho u s e c o nt r a c t w or k e r s or t e m p or a r y employees to increased organizing and labor dispute concerns, whether o r n o t t h o s e e m p l o y e r s a r e unionized. In recent years, unions and politi- cians alike have increasingly ques- tioned the use of temporary workers, contract employees, and indepen- dent contractors. For example, Uber has been in the news recently over whether its drivers are employees of the company or independent con- tractors, and McDonald's has been challenged on the amount its fran- chises pay employees. Even Demo- cratic presidential hopeful Hillar y C l i nton h a s s t at e d t h at t he "on demand or so called 'gig' economy is creating exciting oppor tunities and unleashing innovation, but it's also raising hard questions about workplace protections and what a good job will look like in the future." Te NLR B majorit y drew upon t hese concer ns, poi nt i ng out t he increased use of contract labor, and observing that the Board's prior test was " increasingly out of step w ith changing economic circumstances, pa r t ic u la rly t he recent d ra mat ic growth in contingent employment relationships." Given t he i nc rea sed at tent ion government agencies and politicians are bringing to bear on employment relationships, along w ith this new NLR B decision, now is a good time for employers, whether unionized or not, to rev iew t heir relationsh ips w ith contract workers, temporar y stafng agencies, and independent contractors, in order to limit legal headaches in the future. The NLRB's Browning- Ferris Decision T he B row ning-Fe r r i s c a se bega n when the Teamsters atempted to organize Browning-Ferris (a recy- cling company). Brow ning-Ferris u t i l i z e d a c o n t r a c t w o r k f o r c e t h roug h L e adpoi nt (it s s t a f f i ng compa ny), a nd t he u n ion f i led a petition seeking to represent those workers. Te union wanted to bar- gain with both Browning-Ferris and Leadpoint, arguing that they were both joint-employers of the contract workers and that it could not ade- q u atel y ba rga i n for t he worker s unless Browning-Ferris was at the table. Browning-Ferris challenged its joint-employer status, arg uing that Leadpoint hired the employees, supervised the employees, directed their work, disciplined them, and terminated them. Browning-Ferris arg ued that it did not control the Leadpoint employees at all. I n it i a l l y, t he N L R B R e g ion a l Director ruled that Browning-Ferris w a s not a joi nt- employer of t he Leadpoint employees. Te Regional Di rec tor appl ied t he t rad it iona l joint-employer test and found that Browning-Ferris did not meaning- f u l l y c o n t r o l t h e L e a d p o i n t employees or d i rec t a ny of t hei r work. Te union appealed the deci- sion to the NLR B, and the NLR B t o ok t he o p p or t u n it y t o s ol ic it amicus briefs on whether it should o v e r r u l e t h e t r a d i t i o n a l j o i n t- employer test. U n d e r t h e t r a d i t i o n a l j o i n t- employer test, the NLR B would only f ind a joint-employer relationship where sepa rate bu si ness ent it ies "share or codetermine those maters governing the essential terms and conditions of employment," including hiring, fring, discipline, supervision, a nd d i rec t ion . I mpor t a nt l y, t he employer had to actually exercise control over the employees, and the control had to be "direct, immediate, and not limited and routine." On A ug u st 27, 2 015, a Demo - cratic NLR B majority, in a strongly contested decision, overturned this traditional test and replaced it with a much more amorphous and fexible st a nd a rd , one w h ich t he d i ssent stated has no " limiting principle." Instead of the traditional require- ment t hat t he employer ac t ually exercise control over employees, the NLR B found that the right to con- trol, regardless of whether exercised or not, and regard less of whether direct or indirect, is sufcient to fnd joint-employer status. As the dissent explained, under the majorit y's test, even a private homeowner hiring a contractor to The NLRB Provides Ammo to Labor Unions By Richard D. Alaniz O n A u g u s t 2 7 , 2 0 1 5 , t h e Nat i o nal L a b o r R elat i o n s Board ("NLRB"), the federal agency responsible for regu- lating labor law, issued a con- troversial landmark decision, which overturned 30 years of established precedent and has the potential to upend traditional labor relations. In the Browning-Ferris decision, the NLRB was sharply divided, with its three Democratic members ruling in favor of the new rule, and its two Republican members issuing a lengthy and scathing dissent. LABOR LAWS WAGE RIGHTS DEMAND COSTS OLDER ADMINISTRATIVE AGENCIES MINIMUM EXIST UNIONS AGE COUNTRY EMPLOYEES DISTINCTION WORKERS DISCRIMINATION HEALTH