This bill — known as the Save Local Business Act — would amend the National Labor Relations Act to specify that a person can only be considered a “joint employer” if they exercise actual, direct, and immediate control over employees. In effect, the bill would negate a 2015 ruling by the National Labor Relations Board (NLRB) which held that a joint employer relationship could be established when an employer exercises control over employment matters indirectly or if they have reserved such control by contract, such as a parent corporation over its franchisees.
What is House Bill H.R. 3441?
Cost of House Bill H.R. 3441
In-Depth: Sponsoring Rep. Braley Byrne (R-AL) introduced this bill to rollback the NLRB’s joint employer standard to only apply to employers that exercise significant control over the terms and conditions of workers’ employment:
“Federal labor policies should be focused on benefiting workers and helping small businesses grow instead of creating barriers that limit opportunity. 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. I am especially pleased our legislation has earned support from both sides of the aisle, and I am committed to continuing to build momentum as the bill moves through the legislative process.”
Lead cosponsor Rep. Henry Cuellar (D-TX) added:
“Owning and maintaining a small business has been part of the American dream for generations. 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. I encourage my colleagues from both parties to support local businesses by supporting this legislation and restore the traditional joint employer standard as the law of the land.”
House Democrats on the House Education and Workforce Committee opposed this bill’s passage in committee on the grounds that it “enables unscrupulous employers to avoid their legal responsibilities… while denying employees recourse for violations of law and inflicting collateral damage to adversely impacted businesses.” They added:
“The Save Local Business Act dismantles longstanding legal protections for employees under the National Labor Relations Act and the Fair Labor Standards Act. It does so by allowing employers who jointly determine working conditions to evade responsibility for collective bargaining, and to avoid liability for wage theft, child labor, and equal pay violations committed by subcontractors and intermediaries over which they exercise control. Despite the bill’s pro-business title, [it] disadvantages franchisees by leaving them on the hook for decisions directed by their franchisors.”
Of Note: This bill was introduced in response to the NLRB’s 3-2 decision in Browning-Ferris Industries of California Inc. that companies sharing only “indirect” or “potential” control over another’s workforce may be considered joint employers.
- Sponsoring Rep. Bradley Byrne (R-AL) Press Release
- House Education and Workforce Committee Press Release
- House Education and Workforce Committee Report
- CBO Cost Estimate
- Alabama Political Reporter
- Bloomberg BNA
- The Hill
Summary by Eric Revell(Photo Credit: PeopleImages / iStock)
Save Local Business Act
To clarify the treatment of two or more employers as joint employers under the National Labor Relations Act and the Fair Labor Standards Act of 1938.
- Not enactedThe President has not signed this bill
- The senate has not voted
- The house Passed November 7th, 2017Roll Call Vote 242 Yea / 181 Nay
Committee on Education and LaborHealth, Employment, Labor, and PensionsWorkforce ProtectionsIntroducedJuly 27th, 2017
- house Committees