The Hill: Congress must act against new ‘joint employer’ standard


On Nov. 8, Americans went to the polls to select those who will lead our country, and their preferences were clear. What we have learned about our fellow citizens in the days since is also quite clear. The working people of our country feel at best ignored and at worst forgotten by their government.

Hard-working small business owners and their employees comprise the fabric of our nation, and I have consistently fought to reduce the regulatory burden on them. In recent years, however, I have increasingly heard from small business owners and employees who are feeling the effects of burdensome and misguided government regulations.

Perhaps the most harmful characteristic about government regulations is that they provide a competitive advantage to big corporations over small businesses.

When the federal government imposes a new overtime regulation or requires employers to fill out more complex paperwork, big businesses can handle it. They have the attorneys, human resource staff, and other assets to comply with most any regulation. Small businesses, however, often do not have the benefit of employment and labor attorneys to make sense of it all, and they often suffer as a result.

There may be no regulation that threatens to crush small businesses and working people more than a recent ruling from the National Labor Relations Board relating to the definition of a “joint employer.” For decades, joint employers were known as those that mutually had “direct” and “immediate” control over the essential conditions and terms of employment for certain workers. Under the new, unpredictable standard based on “indirect” or even “reserved” control, companies can be liable for employees they never hired or supervised at contract firms they do business with. If big firms are liable for the actions of small firms and franchises, they are unlikely to do business with them any longer.

The new “joint employer” standard directly threatens the livelihoods of thousands of American workers – the very people who feel the government is leaving them behind. According to FRANdata, an independent franchise-information firm, an estimated 600,000 American jobs, from more than 40,000 different businesses, could either be lost or not created within the franchise industry because of the joint employer ruling.  We should expect additional job losses in other parts of the American economy.

This is government overreach at its worst. The joint employer standard creates a precarious situation that will take Congressional action to resolve. President-elect Trump can immediately begin unraveling some burdensome regulations as soon as he takes office through executive action. But regulations by independent agencies like the NLRB require much more than a stroke of a pen to correct.

So-called “progressive” appointees dominate the current NLRB. While President-elect Trump will have the opportunity to nominate two new Board members immediately, it may be months before his nominees can be confirmed and get to work, and possibly a year or more after that before the Board could reverse the harmful joint employer decision.

Congress needs to act on behalf of these American workers and their families. We cannot wait and hope for regulatory agencies or the courts to fix joint employer. Fortunately, there is bipartisan support today in Congress for legislation to restore the sensible joint employer definition that was in place for more than 30 years. That legislation should be considered soon, as it is the most logical and straightforward way to prevent the damage to our local economies that another year and a half of waiting would bring.

The working people in America are clearly tired of a government that ignores them or, worse, puts in place artificial impediments that restrict their ability to achieve their version of the American dream. Congress should quickly bring needed relief to local businesses across America, and in so doing, show the working people of our country that we are listening.

 

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