Coalition to Save Local Businesses Lauds House Introduction of Joint Employer ‘Fix’

Coalition Commends Bipartisan Support to Protect Future of Local Businesses

WASHINGTON, July 27— Coalition to Save Local Businesses Executive Director Michael Layman released the statement below following the House introduction of the “Save Local Business Act,” legislation sponsored by Chairwoman Virginia Foxx (R-NC) and Reps. Bradley Byrne (R-AL), Tim Walberg (R-MI), Henry Cuellar (D-TX), and Lou Correa (D-CA), and intended to provide needed clarity on the joint employer issue to America’s small businesses and entrepreneurs.

“For all of the local business owners who have worked tirelessly over the last two years to raise awareness of the consequences of the NLRB’s expanded joint employer scheme, today marks a very promising and long-awaited development,” said Layman. “The Save Local Business Act means one thing for people on Main Street: if you’re a local business, you are responsible for your employees. But it also makes clear, if you’re a local business, you are not liable for employees you do not employ. And no one else is liable for your actions either. It’s exactly the common-sense approach that small business owners want.”

In its 2015 Browning-Ferris Industries (BFI) case, the National Labor Relations Board (NLRB) adopted an expanded “joint employer” standard. The traditional “direct and immediate” control standard worked well to provide employers with clarity about their legal obligations. But in the aftermath of BFI, a joint employer is anyone who exercises indirect, potential, or unexercised reserved control, resulting in uncertainty and an unpredictable liability standard for local businesses throughout the country. Furthermore, local businesses have seen expanded joint employment liability under several other statutes, most notably the Fair Labor Standards Act (FLSA).

The Save Local Business Act would update the National Labor Relations Act (NLRA) and FLSA to provide clarity for local businesses on what it means to be a “joint employer.” Under this bipartisan legislation, an employer may be considered a joint employer of a worker only if it “directly, actually, and immediately” exercises significant control over the primary elements of employment, such as hiring, firing, determining pay, or supervising employees on a routine basis.

“Members of the Coalition to Save Local Business applaud the hard work of Chairwoman Foxx and Reps. Reps. Walberg, Byrne, Correa and Cuellar, on behalf of local businesses in every community in America, and together we will continue working with Members from both sides of the aisle to grow the economy, create jobs, and protect the futures of hard-working Americans,” Layman added.