Bill Introduced in House to Limit Joint Employer Classification

On July 27, Representative Bradley Byrne (R-AL) introduced the Save Local Business Act (H.R. 3441). The bill would amend the National Labor Relations Act (NLRA) and the Fair Labor Standards Act (FLSA) to clarify that businesses may only be deemed a joint employer if they exercise “significant control” over essential working conditions of workers in a way that direct, actual, and immediate. The bill is in direct response to a recent decision by the National Labor Relations Board (NLRB) which set a more expansive definition for joint employment. In the Browning-Ferris decision, the NLRB ruled that a business would be deemed a joint employer if it exerts “indirect control” over a contractor or reserves for itself the ability to exert such control. (For more background on the Browning-Ferris case, click here. The decision is currently under appeal.) 

 

Joint employer classification is an important issue for providers who may be looking at moving to an independent contractor business model or who have been impacted by the DOL’s Home Care rule, which prohibits joint employers from availing themselves of the companionship exemption within the FLSA. The Save Local Business Act currently has 37 co-sponsors. A press release issued by the bill’s original co-sponsors is available here.