October 5th, 2017
NJ BIZ: Time for Congress to come together on joint employer
By Mike Veneziano | New Jersey’s beaches, casinos, national parks and world-famous agricultural products have long attracted local residents and U.S. and international tourists alike. Together they spend $50 billion on food and drink, at hotels and lodges, and in retail establishments statewide.
Although our hospitality businesses are strong, we have an opportunity to bolster them even further and support the industry’s more than 320,000 jobs. How, you might ask? By urging elected officials to get behind the bipartisan Save Local Business Act (H.R. 3441).
This legislation, introduced by Democrats and Republicans in Congress, seeks to clarify a workforce guidance issued by the National Labor Relations Board (NLRB) that’s left business owners of all sizes scratching their heads. The confusion stems from an NLRB decision that expanded the standard for when two businesses are both liable for employment practices – more commonly known as joint employer.
Previously, it was easy for a business owner to determine whether they were liable for another business’s employees. For example, are they on the payroll? Do they have a company-specific job description? Does she or one of her managers handle their performance reviews?
Unfortunately, it’s not so cut and dried anymore. Under this new standard, a business owner can be liable for employees when it has as little as “indirect” or “potential” control. Most business people find this definition baffling. How do we know whether we will be held responsible for labor practices we’re not involved in or for employees we don’t oversee? It’s nearly impossible, and even lawyers are having a tough time advising clients on how to adjust.
Now, there is a real possibility that a hotel owner could become entangled in a salary dispute between the handyman company they use and one of the handyman company’s employees who sometimes works at the hotel. Or a restaurateur could be on the hook for a janitorial company’s overtime woes with their own employees who sometimes clean the restaurant. Similar problems could arise when using service companies for tasks like laundry, bookkeeping, marketing, or other functions.
The biggest problem of all is the fact that businesses don’t know if or when they will be liable. It could take years for NLRB cases to settle specific questions about which types of contracting, consulting, partnership, or franchise relationships trigger joint employer status. In the meantime, business owners are struck by uncertainty.
That’s why H.R. 3441 is so important. It would immediately establish a clear, common sense joint employer definition that businesses can comprehend. And that’s all any entrepreneur or executive wants—to understand the law so they can run their business.
With this issue settled, entrepreneurs will be empowered to follow their dreams. They can open that second location, license their concept to another business owner, or hire a Main Street company to take accounting headaches off their plate.
This legislation would also help to ensure a wealth of jobs for entry-level and lower-skilled employees. There is a growing skills gap in the United States, and many of these career opportunities are perfect for skills training and apprenticeship programs that will lay the foundation for future career opportunities.
The livelihood of the New Jersey restaurant and hospitality industry should be a top priority for Representative Josh Gottheimer. It creates economic prosperity and employs a significant number of people in his district. Hopefully, Rep. Gottheimer and our entire New Jersey Congressional Delegation will sign on to support this important legislation.
Mike Veneziano is vice president of finance and government affairs for Doherty Enterprise, which oversees multiple franchise restaurants across New Jersey, and vice chairman of the New Jersey Restaurant and Hospitality Association.