Bill Addresses “Joint Employer” Definition

New legislation introduced in the U.S. House of Representatives would roll back the Obama administration’s expanded definition of “joint employer” under the National Labor Relations Act (NLRA) and Fair Labor Standards Act (FSLA).

That joint employment standard could hold an employer liable for the labor and workplace practices of independent contractors and subcontractors. This includes subcontractors such as glaziers, as well as employers such as glazing contractors that may contract some of their own work.

The legislation, titled “The Save Local Business Act,” was brought forward by congressman Bradley Byrne (R-AL). The bill has bipartisan support from 29 co-sponsors, including House Education and the Workforce Committee chairperson Virginia Foxx (R-NC). According to a release from Byrne’s office, the act amends the NLRA and the FLSA “to restore the commonsense definition of what it means to be an employer. The legislation clarifies that two or more employers must have ‘actual, direct, and immediate’ control over employees to be considered joint employers.”

As USGNN.com™ covered in February, a recent appeals court decision was issued that may have muddied the waters of the contractor-subcontractor relationship, finding that the two parties could be considered “joint employers” of the subcontractor’s workers. In June, the Department of Labor withdrew its 2015 and 2016 informal guidance on the joint employment standard.

Under the previous guidance, “joint employment” was defined as a worker who is employed by two or more employers, making both of them responsible for compliance with a statute. That would include contractors, subcontractors, staffing agencies and franchisees.

The new legislation was lauded by the Associated Builders and Contractors (ABC). Kristen Swearingen, ABC’s vice president of legislative and political affairs, says the previous administration’s expansion of the joint employer standard “disrupted decades of established law and undermined the business relationships between a brand company and local franchise business owners; contractors and subcontractors; and businesses and their suppliers and vendors.”

She adds, “This legislation would codify the previous standard in both the National Labor Relations Act and Fair Labor Standards Act, and would restore clarity and protect businesses from unnecessary involvement in labor negotiations and disputes involving workplaces in which they do not have direct control. The restoration of this standard will protect hundreds of thousands of small and local businesses and allow them to grow American jobs again.”

The three-page bill can be read here.

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