How Congress can help your favorite local restaurants
By Chris Duggan
San Diego is transforming into more than America’s Finest City. It’s becoming a culinary hot spot. Previously known for its fish tacos and oceanside cuisine, creative chefs from across the United States and even Mexico are filling the city with everything from exotic flavors to good old American barbecue. Foodies from all over are packing into our local eateries to check out the hype.
Unfortunately for our booming food industry, a decision out of Washington, D.C., is threatening the livelihood of the country’s restaurant and hospitality industry. The National Labor Relations Board in 2015 redefined what it means to be a joint employer, or when two companies share supervision of an employee.
It’s no longer clear whether outsourcing the laundry makes a bed-and-breakfast owner liable for workplace safety at the neighboring dry cleaner or if contracting out some renovations puts an authentic Mexican restaurant owner on the hook for construction workers’ unpaid overtime.
The wide-ranging uncertainty that is infecting entrepreneurs could have widespread economic impact, too. Despite chefs and restaurant owners flocking to San Diego from all over, our fine city is experiencing a flat unemployment rate and a year-over-year decline in hiring.
How can that be so? No doubt, much can be attributed to an unstable employer environment.
Business owners are now using their limited resources to buy extra liability insurance and invest in legal counsel to protect the businesses they built. This is money that could be used to expand and hire more employees. The consequences of the joint employer ambiguities on the hospitality industry are a big deal in an area where nearly 35 million visitors spent $10.4 billion locally on tourism last year — supporting 184,000 leisure and hospitality jobs. To help invigorate economic momentum and job growth in San Diego, lawmakers must consider a fix to this standard.
Recently, there has been a welcome flurry of activity in our nation’s capital to try and provide restaurant owners and small businesses with some much-needed clarity. In fact, the Department of Labor moved in June to roll back the controversial decision with an executive order. Both developments prove that policymakers on both sides of the aisle hear the restaurant and small business community’s concerns. But in order to sustain a clear understanding that small business owners can rely upon, Congress must act.
Fortunately, there is already a piece of bipartisan legislation in Congress that would immediately fix this two-year old problem. The Save Local Business Act (House Resolution 3441) would return us to the common-sense definition where a business owner is accountable for his or her own employees, not those of other companies. Additionally, workers would be employed by the companies that hired them, not every other entity they consult for, contract with or provide services to.
Bringing back straightforward employer-employee relationships will make the workplace a less confusing place, where both sides can be confident in the lines of communication and responsibility. This will, in turn, have a positive impact on restaurateurs that are eager to return their focus to making great food.
H.R. 3441 is exactly what San Diego restaurants need. Hopefully, the California congressional delegation will sign onto this bill and continue leading the way for our bustling hospitality community. Our innovative chefs, restaurateurs and best-in-class workers who make this America’s Finest City are counting on it.
Duggan is the director of local government affairs of San Diego, Imperial, Riverside and San Bernadino counties for the California Restaurant Association.
To read the full editorial in the San Diego Union-Tribune, click here.
To learn more about the Save Local Business Act, visit edworkforce.house.gov/jointemployer.
Obama's fiduciary rule is already hurting small savers. Here's how to roll it back
By Chairwoman Virginia Foxx (R-NC) and Rep. Phil Roe (R-TN)
Saving for retirement is a difficult challenge for Americans across the country. By one estimate, there are nearly 40 million working families who haven't saved a dime for retirement. It's clear the last thing Washington should do is create new barriers to the financial security Americans need when they retire.
That's why it's so mind-boggling that the Obama administration put in place a so-called fiduciary rule that makes it harder for people to build a secure retirement.
We've always agreed that retirement advisers should act in good faith; we've been saying that from the start. But a rule requiring retirement advisers to serve their clients' best interests is completely pointless if it means many Americans won't have access to retirement advice at all.
For years, the House Committee on Education and the Workforce has led the fight against this fundamentally flawed rule. We weren't the only ones who raised concerns. In fact, nearly 100 House Democrats cautioned the Obama administration against finalizing a rule that would "have a disproportionate impact on lower- and middle-income communities."
Sadly, that's precisely what the previous administration settled on. And you don't have to just take our word for it. Even former President Barack Obama's own secretary of treasury, Jack Lew, recently acknowledged the rule will lead to harmful consequences, including "pricing smaller investors out of the financial advice market."
Indeed, according to the American Action Forum, the rule could increase costs on retirement savers by $46.6 billion. Those who can least afford it will be hit the hardest. Many working families will soon find they can no longer afford personal retirement advice, and small businesses will face new obstacles as they try to set up retirement plans for their employees.
We're seeing these predictions come to fruition. Several firms have already dropped the very types of services those with limited savings are more likely to rely on, and it's only a matter of time before things get worse.
A U.S. Chamber of Commerce report notes that 71 percent of advisors surveyed will stop providing advice to some of their clients with small account balances. Perhaps most concerning, the report found that up to 7 million retirement savers may lose access to retirement advice altogether.
For these very reasons, we wish the rule had been scrapped altogether. But from Secretary of Labor Alexander Acosta's perspective, his hands were tied. That makes it even more compelling to develop a legislative solution.
To his credit, the secretary also noted that "America was founded on the belief that people should be trusted to govern themselves … Voters elect their representatives to Washington." We agree. As the People's representatives, we have a duty to fix the fiduciary mess.
Our committee recently advanced the Affordable Retirement Advice for Savers Act, which will repeal the fiduciary rule and preserve access to affordable retirement advice. It also amends federal law to require retirement advisers to act in the best interests of their clients. Legislation — not 1,000 pages of red tape — is the right way to address an issue with such a widespread impact.
This legislation proves we can hold financial advisers accountable without causing millions of Americans to lose access to affordable retirement advice. It's our hope that members of both parties will do the right thing by joining together and sending H.R. 2823 to President Trump's desk. The American people are depending on us to do just that.
Rep. Virginia Foxx, R-N.C. (@virginiafoxx), is chairwoman of the House Committee on Education and the Workforce. Rep. Phil Roe, R-Tenn. (@DrPhilRoe), a member of that same committee, also chairs the House Committee on Veterans Affairs.
To read the full op-ed in the Washington Examiner, click here.
I was proud to introduce the Save Local Business Act because it’s good for workers and it’s good for job creators. I appreciate the opportunity to speak in support of this commonsense proposal today.
As a former labor attorney, I can tell you it used to be pretty clear who an employer was. But now, two completely separate employers can be considered joint employers if they make a business agreement that “indirectly” or even “potentially” impacts their employees.
Those are certainly vague terms. So vague that many lawyers may not even agree on what exactly they mean. But we know the real-world impact has been confusion, uncertainty, and growing legal jeopardy.
Here’s what those terms mean to the owner of Wintzell’s Oyster House in my district in Mobile, Alabama. The owner, Bob Omainsky, wrote recently in Alabama Today:
“If we hire an outside landscaping company to keep our lawns lush, I could be considered a joint employer if I show the landscapers where to mow. Or, if I contract a food supplier for certain ingredients, I could become part of a lawsuit if one of their workers complains about overtime pay. The uncertainty is nothing more than governmental overreach that is crippling eateries like Wintzell’s and discouraging growth throughout the restaurant industry.”
There are small business owners in all of our districts who are working hard each and every day to create jobs and contribute to our local economies, and they deserve better than this. They deserve clarity.
Workers deserve better, too. They deserve better than an extreme and unworkable rule that threatens 1.7 million jobs. And they deserve better than unelected bureaucrats interfering with their relationship with their employer for the sole purpose of empowering union and trial lawyer interests.
That’s right. This joint employer scheme was really intended to make it easier for Big Labor to organize small businesses. It’s no surprise that some of the nation’s largest labor unions have been peddling scare tactics and spreading false information about H.R. 3441.
So let me be clear on what this bill does. H.R. 3441 maintains existing worker protections under the National Labor Relations Act and the Fair Labor Standards Act.
We are amending the NLRA to roll back the Browning-Ferris decision and prevent future NLRB overreach. And we are amending the FLSA because aggressive trial lawyers and activist judges have made matters even worse by creating a confusing patchwork of joint employer standards across the country.
Again, this bill does not take away a single protection from a single worker. Instead, it ensures the actual employer is legally responsible for providing those protections. If everyone is responsible, no one is.
Some have wrongly claimed that the joint employer standard reflected in H.R. 3441 is somehow a dramatic departure from long-standing policy prior to the NLRB’s 2015 ruling. That claim is quite frankly absurd.
I’d like to remind the members of this committee that it was the Browning-Ferris decision, and actions by Obama-era bureaucrats, that completely disrupted what was once a stable legal environment and threatened countless local businesses as a result.
H.R. 3441 simply restores the commonsense joint employer standard that workers and employers relied on for decades. 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 bill as introduced is consistent with case law prior to BFI, and today’s markup presents an opportunity to make the bill even clearer.
That’s why the substitute amendment I am offering makes clarifying and technical changes to the underlying bill. I urge all members to support the substitute, as well as H.R. 3441.
To read PDF version, click here.
Today, the committee will consider H.R. 3441, the Save Local Business Act. Since the National Labor Relations Board unilaterally redefined what it means to be an employer in 2015, more than two dozen witnesses have come before this committee and others in Congress to tell us, in practical terms, what the decision means for the future of American jobs.
We’ve heard firsthand how the board’s decision, and the actions of regulators and activist judges that followed, have disrupted the daily operations of business owners across the country.
The consequences have been far-reaching. Basic, business-to-business relationships that have long been a part of the American way of life and a critical component to the success of our economy have been called into question.
The lines of responsibility for important worker protections are now blurry. Small business owners fear they will lose the independence they worked so hard to achieve. Others who rely on contracting opportunities fear their options for growth, along with their limited stream of revenue, will suddenly diminish.
Meanwhile, many hardworking men and women are left wondering why the relationship they have with their employer is changing, or if unelected bureaucrats or activist judges will dictate that they have a new boss at some distant company.
And that’s not all. While we’ve all been working together here in Congress to support workforce development reforms, we’ve simultaneously heard how the joint employer scheme makes it harder for employers effectively to do their part in addressing our nation’s skills gap.
All of this damage began with one extreme and obstructive ruling. We wouldn’t be here today if the overwhelming consensus wasn’t that the NLRB and Obama-era bureaucrats made serious mistakes.
We’re here today to complete one of the most important steps in correcting those mistakes. Mr. Byrne has introduced the Save Local Business Act with the support of most of the members of this committee.
The bill directly addresses the mistakes the NLRB made when it redefined the concept of joint employment and put so many jobs and livelihoods at risk. And it addresses the mistakes the Obama administration made when it spread the board’s flawed policy to other areas of federal labor law.
Both of our workforce subcommittee chairmen, Mr. Byrne and Mr. Walberg, have carefully examined the statutes under their respective jurisdictions. They worked together to ensure that the scope of the bill under consideration today appropriately clears up the existing confusion and restores the commonsense concept of joint employer for businesses of every size.
American workers deserve to know who they’re dealing with in their workplaces. They should have the power to speak for themselves on matters of pay, schedules, professional development — anything that helps them have the successful life they want for themselves.
In order to do that, they need to know with certainty who their employer is. But both employers and employees have made clear to this committee that the current joint employer standard is confusing at best, devastating at worst, and simply not sustainable.
We have heard them, and that’s what leads us to where we are today. I thank Mr. Byrne for his hard work bringing the Save Local Business Act this far, and I thank all of our members for being here and for ensuring the joint employer problem and this solution get the thorough attention they deserve.
To read PDF version, click here.
This committee has been fighting to roll back the extreme joint employer scheme since it first took effect, and for good reason. It’s a threat to jobs, entrepreneurship, and local employers across the country.
We know this new joint employer standard has led to a whole host of real-world consequences, because that’s exactly what we’ve heard from business owners and their employees in each of our districts and before this committee.
We’ve all heard the voices of local job creators who fear they could lose control of their businesses to larger companies. One small business owner, who described himself as the “living definition of the American Dream,” warned the committee that he would “virtually overnight become a manager for a large company.”
We’ve also heard how this new standard has made it harder for small businesses to grow and create jobs in their communities. Kristie Arslan, the owner of a small gourmet popcorn shop, said she was considering opening five new locations through franchising, but the joint employer threat made her expansion plans too risky. She decided she could only open one new store instead of five.
This is just one concerning example of lost jobs and opportunity. So many hardworking entrepreneurs, who took a risk to start their own business, now find themselves in a sea of uncertainty. And it’s not just those in the franchising industry. Many small businesses and local vendors rely on contracts with larger companies, and they are concerned those contracts could soon be harder to come by.
According to the American Action Forum, the joint employer scheme threatens 1.7 million jobs. To protect those jobs, we have to restore a commonsense definition of what it means to be an employer.
I’d like to remind some of our critics that the Save Local Business Act reflects the same straight- forward joint employer test that workers and job creators relied on for decades.
To be someone’s employer, it makes perfect sense that you need to have “actual, direct, and immediate control” over terms and conditions of employment. This clear test does nothing to let employers off the hook for their obligations to their employees. What it does is ensure the actual employer is the one held responsible. And that’s the way it should be.
It’s time to settle once and for all what constitutes a joint employer — not through arbitrary and misguided NLRB decisions and rulings by activist judges — but through legislation. This is obviously an area of labor law that is in desperate need of clarity.
As recognized by at least three of our colleagues on the other side of the aisle, this isn’t a Democrat versus Republican issue. The Save Local Business Act is about providing certainty for job creators in each and every one of our districts. It’s about keeping the American Dream within reach.
To read the PDF version, click here.
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To most Americans, the question over who their employer is seems to be an obvious answer. It’s the person who hired them, the one who signs their paycheck.
As a former labor attorney, I can tell you it used to be very clear in legal terms how you become someone’s employer. But that’s no longer the case since the National Labor Relations Board stepped in.
Many people would be shocked to find out that some company they’ve had zero contact with is also considered their employer, in addition to the employer that actually hired them.
Now, we all agree there are times when two or more employers should be deemed “joint employers.” Before the NLRB overstepped, there was a commonsense understanding of the circumstances establishing that joint employer relationship. Both employers had to have “actual, direct, and immediate” control over essential terms and conditions of employment.
This standard made sense. But today, business owners and their employees face a standard vastly different, and far more confusing. They face a situation where a group of unelected bureaucrats in Washington are interfering with their relationship in a way that has created a lot of problems.
The NLRB’s decision and the Obama administration’s actions that followed, in addition to a litany of rulings by activist judges, have inserted a great deal of uncertainty and confusion into the traditional employer-employee relationship. Two completely separate employers can be considered joint employers if they made a business agreement that “indirectly” or “potentially” impacts their employees.
What does that even mean? It’s vague and confusing. Think of it from the employee’s standpoint. There shouldn’t be any room for question on who their employer is.
As for employers, they should have the clarity they need to look out for their employees in the way the law requires. Because in order for employees to have strong protections in the workplace, it needs to be crystal clear who is responsible for providing those protections.
We are here today because we are determined to provide that clarity once and for all and protect jobs and small businesses in our communities. I’m proud to say three of our Democrat colleagues, Representatives Correa, Cuellar, and Peterson, are cosponsors of the Save Local Business Act, and we hope to continue to build bipartisan support so we can restore commonsense to the joint employer issue.
This is an issue of great importance to both of our workforce subcommittees, which is why this critical legislation has been a joint effort with my colleague, Mr. Walberg. Chairwoman Foxx has made the Save Local Business Act a top priority for the full committee, and this hearing will bring us one step closer to moving it through the legislative process.
To read PDF version, click here.
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Rep. Virginia Foxx (R-NC), chairwoman of the Committee on Education and the Workforce spoke on the House floor to commemorate the 25th anniversary of the opening of the nation’s first charter school, and praised the hope an opportunity charter schools across the country provide for students and families.
Click here to watch.
“Mr. Speaker, twenty-five years ago something monumental occurred for students and families who were seeking a new way to pursue a high-quality education.
“Twenty-five years ago, our nation’s first charter school, the City Academy, opened its doors in St. Paul, Minnesota.
“City Academy began a new era for school choice, and provided families with an alternative option to the traditional public school system.
“Today, over 3 million students are enrolled in charter schools, and more than 6,800 have opened in over 40 states.
“Charter schools are not only growing as an option for students, but these schools are also getting results.
“Innovative charter schools are providing thousands of students and families with the hope and opportunity that they can receive a high-quality education, and gain the skills they need to succeed for the future.
“I congratulate City Academy for being a true pioneer in school choice twenty-five years ago, and support the expansion of school choice for American students and families.”
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