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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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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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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By CityBusiness Staff
Congressional lawmakers looking at the impact of an Obama-era labor policy heard Tuesday from a New Orleans-based business concerned that it could derail plans to expand in the Gulf South.
Dat Dog, the gourmet hot dog joint that opened on Freret Street in 2011, was one of several businesses asking the House Committee on Education and the Workforce for clarification on joint employer policy.
Under the Obama administration, the Labor Department significantly broadened the definition of a joint employer, and the National Labor Relations Board said a company could be considered a joint employer even if it had only indirect or unexercised control.
In previous years, the NLRB had said a company had to have direct control over the actions of a subcontractor or franchisee’s employees in order to be considered a joint employer.
Jerry Reese, who handles franchise development for Dat Dog, said the new standard could hurt plans to expand in Louisiana and beyond. The restaurant has put new restaurants in Lafayette and Hattiesburg, Mississippi and announced this year it is looking for franchisees in the Gulf South.
“Implementing our expansion plan will certainly depend on Congress’s willingness to help address regulatory obstacles that make the future growth of small businesses, like ours, uncertain,” Reese said. “As with any business that is fortunate enough to grow, we now face new risks. Joint employer is the most prominent risk on our minds.”
“Make no mistake about it: this policy disproportionately affects small businesses,” he added. “Big corporations have the resources, the attorneys and the economies of scale to adapt to joint employer … It’s the small employers like Dat Dog that may run out of resources before we even get started.”
U.S. Rep. Virginia Foxx, R-North Carolina, who chairs the committee, said it supports rolling back the joint employer policy to what it was in previous years.