WASHINGTON, D.C. – Today, Rep. Burgess Owens (UT-04) co-sponsored the Save Local Business Act, legislation to provide clarification and certainty for small businesses while strengthening protections for American workers. Since 2015, the definition of a “joint employer” has been dramatically expanded, resulting in confusing regulations and an unpredictable liability standard for small and local businesses across the country. As a result, employers have seen increases in operational and legal costs, less compliance assistance, and fewer opportunities to create jobs.
“The Biden administration’s recently proposed joint employer rule is a back-breaking regulation for Main Street USA,” said Rep. Owens. “Small business is the heart and soul of Utah’s Fourth District, and employers can’t afford to compete with the White House’s heavy-handed tactics. I am proud to support the Save Local Business Act to restore the flexibility, adaptability, and innovative spirit of small businesses nationwide.”
In 2015, the National Labor Relations Board (NLRB) placed itself in the middle of the employer-employee relationship, changing it in a way that hurt working families and small businesses but empowered union interests. Hiring, work schedules, and pay increases were no longer solely between an employer and an employee. This prompted a similar expansion of the joint employer standard under the Fair Labor Standards Act (FLSA). With these actions, the Obama administration and the NLRB discarded settled labor policy and blurred the lines of responsibility for decisions affecting the daily operations of local businesses across the country. The Department of Labor is now working to reinstate this harmful framework through a final rulemaking later this year.
Under the current administration’s most recently proposed definition, two or more employers can be considered joint employers for making a business agreement that “indirectly” or “potentially” impacts their employees’ day-to-day responsibilities and working environment. According to the International Franchise Association, the expanded joint employer standard cost franchise businesses $33 billion per year, resulted in 376,000 lost job opportunities, and led to 93% more lawsuits.
The Save Local Business Act:
- Amends the National Labor Relations Act and the FLSA to clarify that two or more employers must have “actual, direct, and immediate” control over employees to be considered joint employers.
- Rolls back a convoluted joint employer scheme that threatens job creation and undermines the American Dream.
- Restores a commonsense definition of employer to provide certainty and stability for workers and employers.
- Protects workers and local employers from future overreach by unelected bureaucrats and activist judges.
The full text of the legislation is available here.