NATSO Submits Testimony to Congress on Joint Employer Standard

On February 14, the House Education and the Workforce Subcommittee on Health, Employment, Labor, and Pensions held a hearing entitled "Restoring Balance and Fairness to the National Labor Relations Board." NATSO submitted a statement for the record highlighting how the National Labor Relations Board's (NLRB's) revisions to the so-called "joint employer" standard in recent years has negatively impacted the travel plaza industry.

By way of background, the NLRB and the Department of Labor began revising in mid-2015 the “joint employer” standard to expand the scope of determining “co-employment” under the National Labor Relations Act. 

Under the expanded “joint employer” standard, a company could be considered a "joint employer" of an employee, with another company, if it possesses the right to control various terms and conditions of employment, regardless of whether the company actually exercises such control.  (The previous standard required actually exercising control.)

Broadening the standard in this manner will expose more companies to legal liability for how their subcontractors, staffing agencies and franchisees treat their employees.  The broader standard also makes businesses responsible for providing overtime pay and healthcare benefits to a larger universe of employees, and further makes businesses more susceptible to workforce unionization. 

These issues are a specific concern for the travel plaza industry, where the franchisee model is ubiquitous, and where many companies hire "independent contractors" to provide various services (e.g., fuel delivery, infrastructure maintenance, etc.) for their facilities.

Although the Trump Administration is reversing many regulations that harm Main Street business owners, a legislative solution is required to address the joint employment standard. The NLRB is an independent federal agency where a majority of its members are Democrats. Further, even if the NLRB reverses its decision, the fix is not necessarily permanent (it could be reversed by a future administration). Furthermore, litigation citing the broad joint employer standards is rapidly growing and targeting business owners. 

“Although well-intentioned, these efforts will result in harming the very individuals that they are designed to protect,” NATSO said in its statement. “NATSO believes the best way to avoid this outcome is for Congress to enact a permanent legislative solution to the joint employer issue that provides certainty to small and large businesses and promotes economic growth and job creation.” 

Also last week, NATSO, along with over 50 other trade associations, urged Congress to reexamine the NLRB joint employer standard. That letter is available here.

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