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February 2024

Joint-Employer Rule Update – Here’s What You Need to Know

By Ronnie Miles

Are your employees your responsibility, or are they shared? Who is liable for employee-related actions? If you are a multi-course owner or a client of a multi-course owner, the answer may be: both of you!

On Oct. 26, 2023, the National Labor Relations Board (NLRB) announced its Final Rule on the joint-employer standard under the National Labor Relations Act (NLRA), which will take effect Dec. 26, 2023, and apply to cases filed after the effective date.

Under the new standard, two or more entities may be considered joint employers if they share or codetermine one or more of the employee’s essential terms and conditions of employment. In practice, this rule will be implicated where one entity is the actual employer of the employees and the other entity is alleged to be a joint employer under this new test. The rule takes an expansive view of “essential” terms of conditions, which are defined as: (1) wages, benefits, and other compensation; (2) hours of work and scheduling; (3) the assignment of duties to be performed; (4) the supervision of the performance of duties; (5) work rules and directions governing the manner, means, and methods of the performance of duties and the grounds for discipline; (6) the tenure of employment, including hiring and discharge; and (7) working conditions related to the safety and health of employees.

The new NLRB's Joint-Employer Rule could significantly impact golf multi-course owners, operators, and their clients. The rule alters the dynamics of employer-employee relationships, potentially leading to crucial changes in how responsibilities and liabilities are distributed. Here is a breakdown of the key concerns for both parties.

For Golf Multi-Course Owners and Operators:

  1. Increased Accountability: The revised Joint-Employer Rule broadens the definition of who can be considered an employer. As a result, multi-course owners and operators may find themselves with increased accountability for employment-related matters, even if they are not directly involved in day-to-day management.

  2. Potential Legal Exposure: With the expanded criteria, owners and operators might face legal exposure for employment issues at individual courses. This means that compliance with labor laws, wage regulations, and employee relations becomes more critical than ever.

  3. Operational Impact: Adjustments to operational practices may be necessary. Clear communication, well-defined roles and responsibilities, and comprehensive training for on-site managers become paramount to mitigate risks associated with the new rule.

For Clients/Contracted Golf Facilities:

  1. Contractual Implications: Clients partnering with multi-course entities need to review and potentially revise existing contracts. The rule may impact the allocation of responsibilities and could lead to renegotiations to ensure clarity on who bears what obligations in terms of employee management.

  2. Risk Assessment: Clients should conduct a thorough risk assessment to understand how the Joint-Employer Rule may affect their business. This involves evaluating potential legal implications and assessing the financial impact of any increased obligations.

  3. Communication and Collaboration: Open communication between clients and multi-course owners/operators is key. Establishing a transparent dialogue about the implications of the rule and how both parties can work together to navigate these changes fosters a collaborative and supportive business relationship.

In conclusion, the NLRB's Joint-Employer Rule demands a proactive approach from both golf multi-course owners/operators and their clients. Understanding the implications, revisiting contracts, and fostering effective communication are essential steps to navigate the evolving landscape of employee management.

NGCOA encourages owners and operators impacted by this new rule to consult their HR advisor and legal teams to fully understand their roles and responsibilities and develop the necessary procedures to protect all parties.

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