House lawmakers on July 27 introduced bipartisan legislation that would reinstate the longstanding Joint Employer Standard that was revised during President Obama’s second term by the National Labor Relations Board (NLRB) and the Department of Labor (DOL).
The Save Local Business Act, introduced by Representatives Virginia Foxx (R-N.C.), Bradley Byrne (R-Al.) and Tim Walberg (R-Mich.), would update the National Labor Relations Act and Fair Labor Standards Act to clarify that two or more employers must have “actual, direct and immediate” control over employees, (such as hiring, firing, determining pay and supervising employees) to be considered joint employers.
The business community has grappled with tremendous uncertainty about the definition of joint employer since 2015, when the NLRB ruled in a decision known as "Browning Ferris" that by merely exercising indirect control or possessing unexercised potential control over work conditions, one could be a joint employer.
This decision dramatically changed when a company may be held liable for labor violations by other employers they contracted with. Under that ruling, a company deemed a joint employer also would assume bargaining responsibilities if the other employer was unionized, which the International Franchise Association (IFA) has argued could crush the franchisee-franchisor relationship. Previously, a company only established a joint employer relationship when they directly controlled the essential terms and conditions of employment of another company with which they contracted.
Since 2015, businesses have been confused because of the unpredictable joint employer liability yet have faced higher operational and legal costs, decreased business values, less compliance assistance, less growth and fewer opportunities to create jobs.
These issues are of specific concern to the truckstop and travel plaza industry, where the franchisor-franchisee relationships are ubiquitous. Furthermore, NATSO members work with a variety of contract workers such as equipment inspectors and fuel delivery personnel. The nature of this work is such that NATSO members may provide detailed instructions as to how equipment must be inspected to ensure that there are no substance leaks, or when fuel must be delivered to minimize disruptions and potential dangers. An expanded joint employer standard therefore could penalize truckstop owners by viewing these work requirements as indicative of a joint employer relationship.
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