House Passes Legislation That Would Repeal Joint Employer Rule

November 15, 2017

National Labor Relations Board

In a 242-181 vote, on November 7 the U.S. House of Representative passed legislation that would effectively “rein in” the National Labor Relations Board (NLRB) by rescinding the joint-employer rule.

The previous standard the NLRB used regarding joint-employers required one business to have "direct control" over the workplace policies of another employer, but in 2015, the NLRB ruled that a company is considered a joint employer with a subcontractor if it has “indirect” control over the terms and conditions of employment or has the “reserved authority to do so.”

However, the Save Local Business Act would change the definition of an employer in both the National Labor Relations Act as well as the Fair Labor Standards Act and should the measure become law, a company could only be considered a joint employer with a subcontractor if it had direct, actual, and immediate control over the terms and conditions of employment.

Some Ready to Celebrate, Others Say Act Would Hurt Workers’ Rights

Business groups and franchisors have long been fighting to change the 2015 definition, claiming that it made one business responsible for the actions of another completely independent business, threatening their business model and hurting the economy. Workers’ rights maintain that the GOP-sponsored bill will only shield corporations and franchisors from liability.

Reaction to the legislation predictably falls along party lines. Democrats say if the measure becomes law, it would make it more difficult for employees to hold employers accountable for abuses, particularly regarding equal pay claims. Republicans insist that workers were already adequately protected under the earlier standard.

Despite success in the House, the legislation has an unclear future in the Senate, where trade groups are hoping for bipartisan support of the bill. The House legislation had 123 co-sponsors (just three Democrats), and only eight Democrats voted in favor of the measure.

If you want to hold an employer accountable for a workplace violation, contact an employment attorney at Murray & Murray online or call 419-624-3000 today.

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