House to vote on repealing joint-employer rule

The House is scheduled to vote Tuesday on a bill to rescind the National Labor Relations Board’s (NLRB) ruling that made employers potentially liable for labor law violations committed by their subcontractors.

The Save Local Business Act, introduced by Rep. Bradley Byrne (R-Ala.), changes the definition of an “employer” in the National Labor Relations Act and the Fair Labor Standards Act.

Under the new definition a company could only be considered a joint-employer with its subcontractor if it “directly, actually and immediately” has control over essential terms and conditions of employment.

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Those include hiring employees, discharging employees, determining individual employee rates of pay and benefits, day-to-day supervision of employees, assigning individual work schedules, positions and tasks, or administering employee discipline.

In 2015, the National Labor Relations Board 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.”

Business groups have been fighting to change that definition ever since, claiming it blurred the lines of responsibility in disputes over working conditions, wages and work they have no control over.

Franchisors in particular fought hard against the rule, claiming it threatened their business model.

“The NLRB created the impossible scenario in which one business can be held accountable for the actions of another entirely independent business,” David French, senior vice president of the National Retail Federation, said in a letter to House leaders Monday.

“These harmful and unnecessary changes have resulted in seemingly limitless liability in business-to-business relationships and a significant lack of certainty for retailers nationwide,” he said.

But workers’ rights advocates say the GOP bill would only insulate corporations, including franchisors, from liability.

“The reason why corporations and franchisors want to pass this law isn’t because anything is vague, they don’t want to be liable for the terms and conditions they force upon subcontractors and workers. That’s what this is really about,” said Judy Conti, federal advocacy coordinator at the National Employment Law Project.

The group claims the bill undermines protections for millions of workers, especially those in low-wage sectors where subcontracting is common, and wage theft and other workplace dangers are prevalent.