Bill Introduced to Clarify Joint Employer Liability

July 28, 2017

A bipartisan group of House members introduced an HR Policy-supported bill that would reverse the controversial 2015 NLRB Browning-Ferris test while also clarifying the joint employer standard under the Fair Labor Standards Act.  Under the "Save Local Business Act" (H.R. 3441), an employer may be considered a joint employer only if it:

Directly, actually, and immediately, and not in a limited and routine manner, exercises significant control over the essential terms and conditions of employment (including 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, and administering employee discipline).

The bill was sponsored by Workforce Protections Chair Bradley Byrne (R-AL) and cosponsored by House Education and the Workforce Chair Virginia Foxx (R-NC) and Rep. Tim Walberg (R-MI).  Among the other 26 co-sponsors were Democrats Lou Correa (D-CA) and Henry Cuellar (D-TX).  According to Rep. Byrne: "Federal labor policies should be focused on benefiting workers and helping small businesses grow instead of creating barriers that limit opportunity."  Rep. Foxx noted: "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."  HR Policy Senior Labor and Employment Counsel Roger King, who recently testified in support of a legislative solution, said:  "Many companies have, and many more would like to have, the freedom to establish corporate social responsibility standards for their contractors, franchisees or others—be it pay, benefits, training, drug testing, background checks, etc.—without having to be drawn into a joint employment relationship and perhaps expensive and protracted litigation."  Separately, the House Appropriations Committee recently approved the 2018 Labor-HHS appropriations bill, which includes a policy rider that would block the NLRB's decision to expand joint employer liability for one year.  However, it is unclear at this point if the rider will be included in the final bill.