House passes roll back of revised joint-employer standard

The House has passed the Save Local Business Act, H.R. 3441, that would roll back the revised joint-employer standard on November 7, 2017. The bill would provide a common sense standard under the National Labor Relations Act (NLRA) and Fair Labor Standards Act (FLSA) for determining whether a joint-employment relationship exists. The bill would restore the long-held standard for determining joint-employer status under the NLRA that was overturned by a decision of the National Labor Relations Board (the Board).
Additionally, the bill would provide a uniform joint-employer standard under the FLSA. Specifically, H.R. 3441 would amend the NLRA and FLSA to allow two or more employers to be considered joint employers only if each shares and exercises actual, direct, and immediate control over essential terms and conditions of employment. In doing so, the bill would protect the independence of businesses, in particular small businesses such as franchisees and subcontractors.
The bill would get rid of the revised joint-employer standard articulated in the 3-2 Browning-Ferris Industries decision, in which the Board returned to its pre-1984 standard for determining joint-employer status under the NLRA. In that ruling, the Board announced that it would no longer require that a joint employer not only possess the authority to control employees’ terms and conditions of employment, but also exercise that authority. Nor would the Board require that to be relevant to the joint-employer inquiry, a statutory employer’s control must be exercised directly and immediately. If otherwise sufficient, control exercised indirectly—such as through an intermediary—may establish joint-employer status.

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