Congress May Rewrite “Joint Employment” Definition

IMG_1092Congress may finally provide some clarity in determining who is a joint employer. In legislation introduced last week, the House proposed a bill that would rewrite the definition of “joint employer” under federal labor law (National Labor Relations Act) and federal wage and hour law (Fair Labor Standards Act).

The Save Local Business Act — despite lacking a fun-to-say acronym — would create a new standard for determining who is a joint employer under these two laws. The proposed new standard would allow a finding of joint employment “only if such person [business] directly, actually, and immediately, and not in a routine and limited manner, exercises significant control over the essential terms and conditions of employment….”

The definition provides examples of what are “essential terms and conditions,” including:

  • Hiring employees;
  • Discharging employees;
  • Determining individual employee rates of pay and benefits;
  • Day-to-day supervision of employees;
  • Assigning individual work schedules, positions, and tasks; and
  • Administering employee discipline.

No longer would a business be deemed a joint employer for exercising indirect or potential control, as permitted by the NLRB in its 2015 Browning-Ferris decision, which is currently on appeal. (Read more about that here.)

The bill would also overrule a recent decision by the Fourth Circuit Court of Appeals that vastly expanded the scope of joint employment under the FLSA, but only for a handful of Mid-Atlantic states.  Read more on that dreadful decision here.)

As illustrated in this colorful map, the current standard for who is a joint employer varies by which law is being applied and by where you live. The bill, if passed, would provide much-needed clarity in the law — or, at least in some of the laws. The bill would not affect the FMLA, federal anti-discrimination law, or any state or local standards. (In other words, loyal reader, you’ll still need this blog. Ha!)

The bill was introduced by Rep. Bradley Byrne (R-Ala.), but already shares some bipartisan support, with co-sponsors including Virginia Foxx (R-N.C.), Tim Walberg (R-Mich.), Henry Cuellar (D-Texas) and Luis Correa (D-Calif.).

Here’s the current bill.  It’s short, so don’t be afraid to click.

No one knows whether this proposed law will take effect or will even reach a vote (except perhaps Carnac the Magnificent!).  But we can expect significant support from the business community, which may create some momentum toward consiuderation and passage. The National Association of Home Builders has already issued a press release praising the proposed legislation.

If Congress wants to make a positive impact on businesses large and small, this bill could do it. So now let’s all sit back and watch how they screw it up.

© 2017 Todd Lebowitz, posted on WhoIsMyEmployee.com, Exploring Issues of Independent Contractor Misclassification and Joint Employment. All rights reserved.

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