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New Federal Regulation Could Impact Sign and Graphics Employers

The National Labor Relations Board (NLRB) recently enacted a new regulation which governs the employer-employee relationship and that could adversely affect thousands of American manufacturers and businesses – including those in the sign and graphics industry.

The NLRB’s decision overturns existing regulations which establishes joint employer status only when a company exercises “substantial direct and immediate control” over the essential terms and conditions of another company’s employees. The new rule turns the “direct control” standard into an “indirect control” test that sucks in thousands of American businesses.

In the sign and graphics industry, this could mean that sign companies that hire installers could be held directly responsible for labor law violations by the subcontractors, and sign companies that serve as subcontractors could find control of their own companies weakened. The NLRB’s decision also threatens sign industry franchises, as it potentially makes franchisors responsible for franchisee employees. Franchisees also potentially could be impacted by labor union action against the franchisor.

This ruling upsets longtime business models, will increase labor costs and have a negative impact on economic growth and job creation. It becomes effective on February 26, 2024.

On January 12, 2024, the U.S. House of Representatives voted to repeal the NLRB’s decision under the Congressional Review Act. The U.S. Senate may take up similar action, but the President has promised to veto any such legislation.

ISA is part of a coalition of like-minded manufacturing organizations that has been opposing the NLRB’s actions on this critical issue and will continue to support efforts that will negate or overturn the NLRBs decision.

For more information, please contact ISA’s David Hickey.

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