The Hill: Congress must act to protect local businesses from joint employer scheme


By Rep. Virginia Foxx (R, NC-05) | Far too often in Washington, D.C., when you have a hammer, everything looks like a nail. That certainly seemed to be the mindset of government bureaucrats during the Obama administration.

In an attempt to solve a problem that didn’t exist, bureaucrats who have never owned a business or made a payroll distorted the definition of what it means to be an employer. It began with the National Labor Relations Board’s 2015 ruling in the Browning-Ferris Industries case, which dramatically expanded the joint employer standard. Then, the Obama administration took this radical policy a step further, spreading it to other areas of federal labor law.

These actions amounted to an unprecedented attack on small businesses — the driving force behind the American economy. As a former small business owner, I understand the many challenges small companies face. It can be very difficult — and costly — for small businesses to get up and running. And once they do, they constantly face tough decisions as they try to hire workers, make a payroll, and keep their doors open.

Through hard work and determination, many entrepreneurs have achieved the American Dream of owning a small business through franchising, which often involves lower start-up costs. But the joint employer scheme puts this successful business model at risk, along with the thousands of jobs that depend on it. According to the American Action Forum, it could result in 1.7 million fewer jobs at a time when our economy is still recovering.

Local employers now face a complicated, confusing, and vague joint employer standard that has threatened their independence and created enormous uncertainty. Two completely separate employers can be considered joint employers simply because they made a business agreement that “indirectly” or “potentially” impacts their employees’ day-to-day responsibilities and working environment.

Countless small business owners have warned they could lose everything they’ve worked hard to build for themselves and their families. At a roundtable I hosted in my district, several franchisees said they likely would not have started their businesses if this new standard had been in effect. And at a recent House Committee on Education and the Workforce hearing, we heard firsthand accounts of how small businesses like Dat Dog, a hot dog restaurant in New Orleans, face so much uncertainty that it’s limiting their ability to expand.

Members of Congress have a responsibility to protect the interests of those who are working hard in our communities and listen to their concerns. How an unelected bureaucrat at the NLRB perceives the joint employer issue from a Washington, D.C. office building is very different than how it looks to the hardworking founder of a small restaurant in Winston-Salem, N.C., whose livelihood and future success depends on the decisions made in our nation’s capital. It is incumbent upon us to be mindful of that perspective.

This is a very real problem in need of a solution. Earlier this year, thirteen of my Democratic colleagues sent a letter to the NLRB asking for clarification on basic elements of the joint employer issue. We agree workers and job creators need clarity and certainty.

Congressional action is the best path to delivering the relief Americans deserve. This is the most logical and straightforward way to undo the damage that’s been done and protect local employers and their employees from future bureaucratic overreach. To fall short of this objective is to shirk our congressional responsibilities.

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