Court Strikes Down NLRB Joint Employer Rule

On March 8, 2024, the U.S. District Court for the Eastern District of Texas vacated the National Labor Relations Board’s (NLRB) 2023 joint employer rule. The new rule, which was set to take effect on March 11, 2024, expanded the criteria for determining joint employer status, potentially increasing the number of businesses classified as joint employers. The vacated rule would have placed more employers at risk of being deemed joint employers, affecting their liabilities and responsibilities towards employees. Under the proposed 2023 rule, an entity could be deemed a joint employer under common-law agency principles if it had authority to control essential terms and conditions of one’s employment, even if the the control was indirect. The Court found that the new rule failed to provide a clear standard for employers to follow.

The ruling has significant implications for businesses, particularly those who work with contractors or franchisees. The current ruling leaves the 2020 joint employer rule in place, which requires direct and immediate control over employees to establish a joint employer relationship. However, other U.S. District Courts are certain to consider the issue in their jurisdictions, likely resulting in a final review by the U.S. Supreme Court.

Understanding FinCEN’s New Rule for Reporting Ownership Interests in Corporations

The Financial Crimes Enforcement Network (FinCEN) recently implemented a significant rule that affects businesses across the United States. As a business owner, it’s crucial to understand this new requirement and ensure compliance.

What Is the New Mandate?

The Corporate Transparency Act (CTA) introduced a beneficial ownership information reporting provision. Under this rule, most businesses—whether corporations, S corporations, partnerships, or other entities—must report their beneficial owners to FinCEN. The goal is to enhance national security, prevent illicit use of the financial system, and identify potential bad actors.

Who Needs to File?

The new rule applies to a wide range of entities, except sole proprietors and certain exempted categories. If you’re a business owner, you’ll need to report any stockholders who own 25% or more of your company. Additionally, beneficial owners include individuals with substantial control over your entity, such as CEOs, CFOs, or chief operating officers. The rule provides standards for determining ownership interests, covering not only shares but also profit interests, warrants, options, and other instruments. The Agency’s Small Entity Compliance Guide provides specific information about reporting obligations and exemptions.

When to File?

The reporting period began on January 1, 2024, and businesses must submit their BOI reports by December 31, 2024. New entities created after January 1, 2024, have 90 days from their formation to file.