U.S. House of Representatives Passes Bill Limiting Definition of Joint Employer
November 9, 2017
New bill would roll back Obama-era expansion of joint employment standard
On Tuesday, November 7, 2017, the United States House of Representatives passed legislation to limit the definition of “joint employer.” The bill, entitled the Save Local Business Act, is a direct response to Obama-era administrative action by the National Labor Relations Board and the Department of Labor (DOL) broadening the joint employer standard to include employers who have potential or indirect control over employees. Business groups attacked this expansion, arguing that the broader standard was confusing, would impede the franchise business model and would curtail business relationships involving contracted labor. Earlier this year, DOL Secretary of Labor Acosta rescinded the 2016 Obama administration memo that interpreted joint employment liability very broadly under the Fair Labor Standards Act; the memo, however, was merely the DOL’s interpretation of the law. If the Senate passes the bill and it is signed by the President, the bill would change decisively the definition of “joint employer” in the National Labor Relations Act and the Fair Labor Standards Act to include only an employer who “directly, actually, and immediately, and not in a limited and routine manner, exercises significant control over the essential terms and conditions of employment.”
We will continue to monitor the developments related to this legislation and apprise you of any updates.
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