Joint Employer Bill OK’d by House Committee

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By Tyrone Richardson

The House workforce committee Oct. 4 advanced a bill that would reverse an NLRB ruling that expanded joint-employer liability for affiliated businesses.

The House Education and the Workforce Committee approved the Save Local Business Act (H.R. 3441) in a 23-17 party-line vote. The measure, introduced July 27 by Rep. Bradley Byrne (R-Ala.), would limit the extent to which affiliated businesses are considered joint employers for wage-and-hour, safety, and other kinds of potential employment liability, as well as collective bargaining purposes.

The measure would amend the National Labor Relations Act and the Fair Labor Standards Act, which requires employers to pay minimum wages and overtime. The GOP-controlled committee Oct. 4 also adopted a substitute amendment by voice vote.

The bill is aimed at reversing the 2015 National Labor Relations Board decision in Browning-Ferris Industries of California Inc. The board held in that case that organizations with indirect control over contractors, franchisees, or staffing agency workers may be considered their joint employers under federal labor law.

“H.R. 3441 simply restores the commonsense joint employer standard that workers and employers relied on for decades,” Byrne said during the markup. “It clarifies that two or more employers must have ‘actual, direct, and immediate’ control over essential terms and conditions of employment to be considered joint employers.”

The committee’s approval tees up the legislation for potential House floor consideration. The bill has 95 co-sponsors, including three moderate Democrats. It’s expected to pass the GOP-controlled House if placed for a vote.

A companion bill has yet to be introduced in the Senate, and such a measure could be harder to pass. Republicans will need the backing of at least eight Democrats to avoid a filibuster.

House Republicans and some business advocates have argued that the board has overreached with its joint-employer decision and the ruling needs to be reversed. Democrats say the NLRB decision must stay for protection of employee rights and protections.

Committee Democrats Criticize Legislation

Committee Democrats echoed that stance during the Oct. 4 markup.

“The bill we are considering today would eviscerate worker protections under the National Labor Relations Act and the Fair Labor Standards Act, by eliminating longstanding avenues for workers to recover stolen wages and secure recourse for unfair labor practices,” said Rep. Bobby Scott (D-Va.), the committee ranking member. “Labor and employment laws have long provided recourse for workers who have joint employers, a situation that arises when more than one entity controls the terms and conditions of employment.”

Democrats introduced several amendments during the markup, including an effort to rename the joint-employer bill to the “Wage Theft Immunity Act.”

“Effectively what this bill will do is create a roadmap for employers to prevent themselves from being held responsible for wage theft, outsourcing the risk of wage theft to others,” said Rep. Jared Polis (D-Colo.), who referenced an Economic Policy Institute study about wage theft.

“Clearly there is not enough incentive already for employers to follow our existing law, and the last thing we need is another loophole to avoid the law,” he said. “This bill makes things worse by creating a guide for employers to protect themselves from the liability” for wage theft, he said.

Byrne responded that “wage theft is against the law today and my bill does nothing to change that one little bit.”

“The amendment’s assumption is that businesses are looking for ways to evade responsibility to workers” he said. “I reject that assumption.”

All amendments introduced by committee Democrats were rejected by the GOP-controlled committee in party-line votes.

Other Efforts to Undo NLRB Ruling Remain

The workforce committee’s approval of Byrne’s bill is one of the current efforts to undo the board’s Browning Ferris decision. The House last month passed a Labor-HHS spending bill with provisions that would reverse the NLRB ruling. Also, a federal appeals court in Washington, D.C., is currently hearing an appeal of the Browning-Ferris case.

Business advocates such as the National Restaurant Association and the International Franchise Association applaud the committee’s advancing the bill.

“We are confident this legislation provides a fair, workable definition of ‘joint employer’ that helps employers understand the rules of the game, but also provides flexibility so that bad actors are held accountable,” said Matt Haller, the IFA’s senior vice president for public affairs.

Cicely Simpson, executive vice president of government affairs and policy at the Restaurant Association, told Bloomberg BNA the group is focused on seeing the bill passed in the House and Senate.

The committee’s markup was a chance to have lawmakers and the public understand “the impact” of the issue of joint employment.

“The markup is another opportunity to talk about it on a broad spectrum,” she said, adding it was a chance to “educate members of what it means and its impacts.’'

To contact the reporter on this story: Tyrone Richardson in Washington at trichardson@bna.com

To contact the editor responsible for this story: Chris Opfer at copfer@bna.com

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