NLRB Joint Employer Rollback: What Subcontractor Relationships Just Became Legal Again
Executive Brief
The Gist: The NLRB just reverted to its 2020 “substantial direct and immediate control” standard for joint employer status—making it harder for GCs to be held liable for subcontractor labor violations.
- The Trap: If you’re a GC who micromanages subs’ crews (schedules, discipline, pay rates), you could still be on the hook for their labor disputes.
- The Play: Review your subcontractor agreements NOW—remove language that gives you “direct control” over their workers’ daily activities.
Why This Matters
For 30 years in the trades, I’ve watched the joint employer pendulum swing like a wrecking ball. Here’s the translation: Under Biden’s 2023 rule, general contractors were getting dragged into union disputes and wage claims even if they just suggested a sub’s crew show up at 7 AM. That “reserved but unexercised control” standard was a lawsuit magnet.
The 2020 Trump-era rule—now back in play—requires substantial, direct, and immediate control. Translation: Unless you’re literally setting the sub’s payroll, writing their schedules, or firing their guys, you’re probably safe. This is massive for residential remodelers and commercial GCs who work with HVAC, plumbing, and electrical subs.
The financial upside? You’re no longer liable for a subcontractor’s wage dispute just because you told them which room to rough-in first. But don’t get cocky—if your contract says you “supervise labor” or “direct work schedules,” you’re still exposed. I’ve seen $50K settlements over poorly-worded agreements. Clean up your contracts with a construction attorney before your next big job. The $1,500 you spend now beats the $75K class-action lawsuit in 2027.
Contractor FAQ
Q: Does this mean I can micromanage my subs again without risk?
A: No—if you control their workers’ schedules, pay, or discipline, you’re still a joint employer under the 2020 standard.
Q: Should I rewrite my subcontractor agreements immediately?
A: Yes—remove any language about “supervising labor” or “directing work hours” and replace it with “coordination of scope and sequencing only.”
Q: What’s the financial risk if I ignore this?
A: Joint employer liability can expose you to back wages, penalties, and union organizing campaigns—I’ve seen claims range from $30K to $200K for mid-sized contractors.
Q: Does this affect my relationship with 1099 workers?
A: This is about subcontractor companies, not individual 1099s—but if you’re misclassifying employees as 1099s, you’ve got bigger problems (see the DOL’s 2024 worker classification rule).
Q: Will this rule survive a court challenge?
A: Likely yes for now—but expect unions to sue, and a future administration could flip it again in 2029.
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Author: Mike Warner
About the Founder Kore Komfort Solutions is an Army veteran-owned digital platform led by a 30-year veteran of the construction and remodeling trades. After three decades of swinging hammers and managing crews across the United States, I’ve shifted my focus from the job site to the back office. Our New Mission: To help residential contractors move from "chaos" to "profit." We provide honest, field-tested software reviews, operational playbooks, and insights into the AI revolution—empowering the next generation of trade business owners to build companies that last.