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The Subcommittee on Workforce Protections, chaired by Rep. Bradley Byrne (R-AL), and the Subcommittee on Health, Employment, Labor, and Pensions, chaired by Rep. Tim Walberg (R-MI), today held a joint legislative hearing to examine H.R. 3441, the Save Local Business Act. 

“To most Americans, the question over who their employer is seems to be an obvious answer. It’s the person who hired them, the one who signs their paycheck,” Chairman Byrne said. “As a former labor attorney, I can tell you it used to be very clear in legal terms how you become someone’s employer. But that’s no longer the case since the National Labor Relations Board (NLRB) stepped in.”

“It’s time to settle once and for all what constitutes a joint employer — not through arbitrary and misguided NLRB decisions and rulings by activist judges — but through legislation," Chairman Walberg added. 

Members heard from Tamra Kennedy, a business owner who started out as a secretary for a local Taco John’s and went on to own several of her own restaurants. Kennedy expressed her concern that the rule may rob her of the success and independence she worked so hard to achieve.

“After two years operating under the expanded joint employer standard, the impact on my business is clear: joint employer means I must pay more to run my business, and earn less in return, all while worrying if the unclear joint employer liability rule will continue to erode my autonomy to run my business,” Kennedy said.

“I may lose my freedom to make decisions for my own business, and eventually, my entire business,” she continued. “When you’ve worked your way up from the bottom like I have, you don’t like to see anyone knock you back down. It’s time we clear up the confusion of joint employer for local business owners and all of those depending on us, and I am confident that the Save Local Business Act does just that.”

Granger MacDonald, a second-generation home builder from Kerrville, TX, explained the importance of contracting in his industry, and how the joint employer scheme limits the ability to contract with other companies.

“Without [contractors], my company and many other family-owned home building firms like it would simply cease to be viable operations,” MacDonald said. But “simply by applying responsible everyday business practices, we could still be held accountable for the labor and employment practices of third-party vendors, suppliers, and contractors over whom we have no direct control.”

MacDonald added that the joint employer threat to contracting undermines the housing market recovery.

“Congress should consider policies that support a continued housing recovery, starting with undoing the harmful precedent set by the NLRB’s expanded joint employer doctrine and other policies that reduce labor market flexibility,” he said.

Employment law expert Zachary Fasman described Browning-Ferris as “nothing short of a disaster” and said “Congress can and should resolve this quagmire by enacting H.R. 3441.”

He also disputed claims made by critics, saying, “This bill would not deny any employee the right to join and form a union or to bargain with his or her employer. It would merely establish that the proper employer for bargaining is the employer that actually sets the terms and conditions of employment in the workplace, and not some affiliated entity which has a commercial relationship with the employer.”

To learn more about H.R. 3441, the Save Local Business Act, click here.

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