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(Illinois News Connection) The National Labor Relations Board recently issued a rule change that may have wide-ranging impacts for workers and businesses. 

The update to the joint employer rule would require parent companies to negotiate collective bargaining agreements with employees even when using a staffing agency or subcontractor. 

It also means franchisors and franchisees can both be held liable for unfair labor practices. This replaces a Trump-era rule change that made it easier for companies to avoid a finding of joint-employer status. 

Brian Petruska - general counsel with the mid-Atlantic regional organizing coalition of the Laborer's International Union of North America - said the rule change is a win for workers. 

"It means that the employees' right to organize still is meaningful," said Petruska, "even in this modern world we live in with layers and layers of LLCs and corporations who are now defining the workspace."

The rule change now faces legal challenges including from the U.S. Chamber of Commerce, which filed suit against the board in federal court. In a statement on its website, the Chamber says the rule change will "create chaos and more legal confusion that will harm both employers and workers."

The NLRB rule establishes that two or more entities may be considered joint employers of a group of employees when more than one entity possesses the authority to control employees' essential terms and conditions of employment. The board says this change is more in line with established common-law agency principles. 

Petruska said he sees opposition to the updated rule coming from a number of industries including restaurants, construction and hotels. He also said the franchise business model will no longer insulate the parent company from labor issues.

"Now," said Petruska, "the fact that they have that control may cause them to be embroiled in local labor disputes that the franchisees are having with their employees."

The new rule will go into effect next February.