Bill to Define "Joint Employer" Passes House
Author: Michael Cardman, XpertHR Legal Editor
November 13, 2017
Legislation that would limit the circumstances under which an employer is considered a "joint employer" under federal employment laws has passed the US House of Representatives.
H.R. 3441, known as the "Save Local Business Act," would amend the National Labor Relations Act (NLRA) and the Fair Labor Standards Act (FLSA) to state that an employer will be considered a joint employer in relation to an employee only if it directly, actually, and immediately, and not in a limited and routine manner, exercises significant control over essential terms and conditions of employment, such as:
- Hiring employees;
- Discharging employees;
- Determining individual employee rates of pay and benefits;
- Supervising employees on a daily basis;
- Assigning individual work schedules, positions and tasks; and
- Administering employee discipline.
This definition would significantly narrow existing interpretations under the FLSA and the NLRA (as laid out in the Browning-Ferris decision), which do not require direct and immediate control over terms and conditions of employment to establish a joint-employer relationship. Instead, a joint-employer relationship can exist if the employer has indirect control over terms and conditions of employment or simply reserves the right to exercise such control.
The bill passed 242-181. Significantly, eight Democrats crossed party lines to vote in favor of the bill - a notable feat in today's polarized legislature that suggests the bill may have a chance of passing the Senate. However, it faces more of an uphill battle in the upper chamber, where a 60-vote majority would be required to bypass an expected filibuster.
Even if the "Save Local Business Act" does not become law, chances are good the National Labor Relations Board (NLRB), with its new Republican majority will overturn its Browning-Ferris ruling anyway.