Employment Law Daily House bill would amend NLRA, FLSA to roll back revised joint-employer standard
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Monday, July 31, 2017

House bill would amend NLRA, FLSA to roll back revised joint-employer standard

By Pamela Wolf, J.D.

On July 27, 2017, House Education and the Workforce Committee members introduced the Save Local Business Act, which would amend the NLRA and the FLSA to restore what they called “the commonsense definition of what it means to be an employer.” The legislation, H.R. 3441, would roll back what proponents see as a “extreme joint-employer scheme” and clarify that two or more employers must have “actual, direct, and immediate” control over employees to be considered joint employers.

The bill, which has bipartisan support, would get rid of the revised-joint employer standard articulated in the 3-2 Browning-Ferris Industries decision, in which the National Labor Relations Board returned to its pre-1984 standard for determining joint-employer status under the NLRA. In that ruling, the Board announced that it would no longer require that a joint employer not only possess the authority to control employees’ terms and conditions of employment, but also exercise that authority. Nor would the Board require that to be relevant to the joint-employer inquiry, a statutory employer’s control must be exercised directly and immediately. If otherwise sufficient, control exercised indirectly—such as through an intermediary—may establish joint-employer status.

The controversial Browning-Ferris decision immediately drew sharp and sustained criticism, as well as Congressional hearings that lobbed a host of grievances, including what is seen as the Board’s overreach.

The Save Local Business Act was unveiled at a press conference with small business owners. “Federal labor policies should be focused on benefiting workers and helping small businesses grow instead of creating barriers that limit opportunity,” said Subcommittee Chairman Bradley Byrne (R-Ala.). “Also important, Congress—not unelected federal bureaucrats—should set our nation’s labor policies through statute instead of executive fiat. Under this bipartisan legislation, workers, and the businesses they work for, will be given much needed clarity and certainty.”

“Owning and maintaining a small business has been part of the American dream for generations,” said Representative Henry Cuellar (D-Tex.). “We must ensure that our small businesses and franchises receive fair treatment from the government, and not confusion and arbitrary regulations that harm them. I have heard from small business owners throughout my district and the country, and it is clear that the NLRB’s joint employer decision was a major threat to the life of the franchise industry and the dream of business ownership for millions of Americans. The Save Local Business Act will provide our nation’s small and franchise businesses the certainty necessary to grow and invest in the future.”

But not everyone is looking through the same lens. Said Committee Ranking Member Bobby Scott (D-Va.): “H.R. 3441 immunizes joint employers from liability, even if they share contractual control of wages, benefits, scheduling, or discipline. Workers who seek to hold their employers accountable for violating wage and hour laws or refusing to collectively bargain will lose under this bill. Real wages have been stagnant for decades, and workers are increasingly employed by temporary staffing firms or working as permatemps. On top of that, this bill strips workers of their legal rights to secure the wages they have earned or to bargain for a better life.”

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