December 9th, 2015
If contractors are employees, small businesses will suffer
By Mark Hagar
In the excitement of every political season, we hear the constant refrain from liberals and conservatives alike – small business is the engine that drives the U.S. economy. And the statistics provide evidence to support those claims. According to the U.S. Small Business Administration, the 28 million small businesses in the U.S. account for 54 percent of all U.S. sales and create 66 percent of net new jobs, adding 8 million jobs to the economy since 1990.
It seems unfathomable, then, that our political leaders, these self-proclaimed champions of small business, would stand idly by while small business is attacked by the gross overreach of administrative authority currently underway by the National Labor Relations Board.
In the recent ruling commonly referred to as Browning-Ferris, the NLRB unilaterally redefined the meaning of “joint employer,” expanding the definition to include employees who are operating under any type of contractual relationship, expanding potential liability to business owners for employees over whom they have no control. The new joint employer definition could apply to subcontractors, consultants or even the purchase of a product or service from another provider.
Browning-Ferris has direct impact on the 600,000-plus franchised small businesses in the U.S., which account for 8 million jobs and 40 percent of all retail sales. By defining the franchisor as a joint employer, this new regulation will limit its ability to grow its organizations and threaten the independent decision-making of the franchisees.
Applying this arbitrary redefinition puts tens of millions of jobs at risk and should not go unchallenged. Currently there is an effort underway to reverse this decision in the form of new legislation. The bipartisan Protecting Local Business Opportunity Act would restore the freedoms of America’s small businesses by amending the NLRB’s definition of joint employer and in so doing restoring the rights of America’s small businesses.
Allowing this regulatory redefinition to stand is counterproductive to the success of our economy and detrimental to the pursuit of the American dream. I urge you to contact your federal elected officials and encourage them to support this important legislation. If ever there was a time to remind those whom we elect of their responsibility to answer for the promises made while securing votes, it is now.
Mark Hagar of Fort Wayne is a certified turnaround professional, a small-business owner and chairman of the Indiana Leadership Council for the National Federation of Independent Business. He wrote this for The Journal Gazette.