Last year, the House of Representatives passed the Save Local Business Act (H.R. 3441). The bill would rescind the National Labor Relations Board’s (NLRB's) decision in the 2015 Browning-Ferris Industries case to overhaul the definition of what establishes a joint employer relationship.

Prior to the 2015 ruling, a joint employer was defined as exercising “direct and immediate” control over another workforce. Unfortunately, the 2015 ruling established an overly broad and ambiguous standard of “indirect, potential, or unexercised reserved” control which has created confusion among employers. Worst of all, the increased threat of potential litigation could discourage flexible work arrangements and reduce economic growth.

Congress should restore the traditional joint employer standard that has served workers, consumers, and employers well for decades. That’s why, on March 13, 2018, Independent Women’s Voice joined a coalition urging House leadership to include H.R. 3441 in the omnibus spending bill for the 2018 fiscal and for the Senate to take it up:

A policy that makes businesses liable for the practices of entities completely outside of their control will cause companies to make changes that leave people worse off, such as ending those relationships with smaller businesses. That means fewer job opportunities, fewer opportunities for entrepreneurs, and fewer chances for American businesses to grow and to create jobs.

Employers that have contractual arrangements with franchisees and other small businesses could be forced to take greater control of their operations to mitigate the nearly unlimited liability to which the new joint employer standard could expose them.

Many independent small businesspeople value the autonomy and flexibility of being their own boss. Many of these job creators have expressed fears about how they will lose autonomy that made them want to start a business.

Government policies should promote, not harm, innovation, flexible work arrangements, and entrepreneurship. H.R. 3441 will restore the longstanding definition of joint employment in the NLRA and FLSA so that an employer is considered to be a joint employer of another company’s workforce only if the company exercises “direct and immediate” control over employment conditions such as hiring, firing, and supervision.


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