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The Practical Employer

Is Joint Employment the Issue That Unites Our Divided Government?

It's an issue that could build a peace bridge over the streets and through the halls of Washington, D.C.

I cannot recall a time when our government has been more divided across ideological and party lines. (I don’t count the early 1860s, because that’s not a time a can remember.) Thankfully, an issue has come along to build a peace bridge over the streets and through the halls of Washington, D.C.

This issue — joint employment, via the Save Local Business Act [pdf], which clarifies that two or more employers must have “actual, direct, and immediate” control over employees to be considered joint employers.

Some background.

Two years ago, in Browning-Ferris, the NLRB rewrote its long-standing rules on joint employment. It expanded and liberalized its standard for when two employers qualify as “joint employers” over a group of employees, rendering each liable for the labor-law violations of the other. It accomplished this expansion by adding “indirect” or “potential” control, in addition to “actual” control, as the lynchpin of joint employment.

Subsequently, the DOL followed suit, adopting the same rule, although in recent months it has backed off.

The Save Local Business Act, introduced with bipartisan support, looks to undo that which the NLRB has wrought, by restoring the “direct control” test for joint employment in both the NLRA and the FLSA.

A person may be considered a joint employer in relation to an employee only if such person directly, actually, and immediately, and not in a limited and routine manner, exercises significant control over the essential terms and conditions of employment (including hiring employees, discharging employees, determining individual employee rates of pay and benefits, day-to-day supervision of employees, assigning individual work schedules, positions, and tasks, and administering employee discipline).

Proponents of the bill tout its “commonsense framework” that gives “much needed clarity and certainty” to “this harmful scheme” which threatens an estimated 1.7 million jobs by holding secondary employers (such as franchisors and contractors) liable for the alleged sins of primary employers (such as franchisees and sub-contractors).

While support for this bill is not universal, if this bill can get Dems and the GOP working together to solve a problem, then it must be doing something right.

Jon Hyman is a partner at Meyers, Roman, Friedberg & Lewis in Cleveland. Comment below or email editors@workforce.com.