House Moving Forward to Restore Joint-Employer Standard

In 2015, the National Labor Relations Board, in the Browning-Ferris Industries case decision, overturned 30 years of case precedent by redefining a joint employer. Previously, businesses could meet the definition of an “employer” if they had “direct and immediate” control over another’s work. Now, a business owner who has “potential” or even “reserved control” over the practices of another business and its employees could be considered a “joint employer.” This change means businesses may now be liable for the contents of a collective-bargaining agreement they did not negotiate, employee overtime issues they did not cause and other employment practices.

This new definition affects more than 770,000 employers nationwide across multiple sectors and impacts every manufacturer that contracts for performed work with an outside entity. Manufacturers that contract out for any product or service with another company could find themselves mired in unexpected issues that arise from that company’s conduct.

The decision has already had a chilling effect on manufacturers’ ability and willingness to hire outside entities they would normally hire for specific expertise and services in differing fields. This hampers productivity and leads to increased overall costs. It also injects risk into the use of innovative and flexible workforce designs that manufacturers may use to cope with uneven production levels or market uncertainties.

The House will take up H.R. 3441, the Save Local Business Act, a bipartisan bill introduced by Congressman Bradley Byrne (R-AL), which will restore the previous standard by amending the National Labor Relations Act to define that a person may be considered a joint employer in relation to an employee only if such person directly, actually and immediately exercises significant control over the essential terms and conditions of employment. Due to the importance of this legislation to manufacturers, the NAM will be key-voting this measure. We are hopeful the Senate will do its part next and take up this important measure so that manufacturers and others can focus on job creation and running businesses, rather than trying to navigate the complicated labor policy landscape.

Amanda Wood

Amanda Wood

Director of Employment Policy at National Association of Manufacturers
Amanda Wood is the director of employment policy at the National Association of Manufacturers (NAM). Ms. Wood oversees the NAM’s labor and employment policy work and has expertise on issues ranging from labor, employment, OSHA, unions, wages and the federal rulemaking process.Ms. Wood’ s background includes legal, policy and government relations experience on a range key labor issues. Ms. Wood received her JD from the University of Maine and undergraduate degree from University of New Hampshire.
Amanda Wood

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