Today, the House Small Business Subcommittee on Investigations, Oversight and Regulations held a hearing looking at the joint-employer standard and its impact on businesses. For months, the NAM has been at the forefront of efforts to push back against the National Labor Relations Board’s (NLRB) decision in Browning-Ferris Industries, which created a new joint-employer standard in federal labor law.
This new standard turned 30 years of precedent on its head by stating that two companies are joint employers if the host employer has any indirect or potential control of the contracted entity’s employees. Previously, a company had to have actual or direct control over these employees.
At the hearing, witnesses on behalf of the Coalition to Save Local Businesses (in which the NAM is a key member) spoke about the deep impacts of this fundamental change and how the broadened term will hurt entrepreneurship. Other witnesses told personal stories of how this radically altered standard would hurt their businesses.
The application of the standard is potentially limitless, and in adopting this new ambiguous definition, the NLRB has made employers potentially liable for employees they do not even employ. For manufacturers that use staffing firms, janitorial services or catering companies for daily food needs, the NLRB has jeopardized how they work.
In addition, the conflict the NLRB has created between a warped view of employer responsibilities and current business practice with decades of precedent needs to be resolved.
Manufacturers have been advocating a solution and are encouraged as leaders in the House and Senate work to undo this dangerous action from the NLRB.
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