Sen. Roger Marshall (R-Kan.) and Rep. James Comer (R-Ky.) introduced legislation that would clarify the definition of joint employer, which they argue has been expanded and has created confusion for small businesses.
The Save Local Business Act would counter the joint employer provision of the Protecting the Right to Organize Act, or PRO Act, which is a top policy focus of the Biden administration, Democrats in Congress and union leaders.
The PRO Act would codify the joint employer standard adopted by the National Labor Relations Board. The standard allows for two or more employers to be considered a joint employer of a worker if there is shared control of the worker’s essential terms and conditions of employment.
The Republican bill would amend the National Labor Relations Act and the Fair Labor Standards Act to make clear that an employer may be considered a joint employer in relation to an employee only if such employer directly and immediately exercises control over the essential terms and conditions of employment.
Marshall and Comer argue that joint employer has resulted in increases in operational and legal costs, less compliance assistance and fewer opportunities to create jobs. They say their bill would provide clarification, certainty for small businesses and strengthen worker protections.
“Small businesses have always been economic drivers, and as the economy continues to recover from COVID-19 we need to be empowering job growth and creation, not stifling it with harmful regulations and ambiguous standards,” Marshall said in a statement.
More than 65 industry groups, led by the International Franchise Association, supported the introduction of the Republican legislation. The other groups include the U.S. Chamber of Commerce, American Hotel & Lodging Association, Associated Builders and Contractors, and the National Association of Manufacturers.
“This legislation comes at a critical time in the economic recovery when so many small businesses are emerging from the COVID-19 pandemic and are seeking legal clarity to help them grow their businesses, create jobs, serve their communities and meet local, state and federal obligations to their employees, customers and the general public,” the groups wrote in a letter of support.
Businesses have pushed back on the PRO Act, which has passed the House and is stalled in the Senate. They argue that the pro-union legislation includes polarizing policy like the independent contractor qualifications that could cause franchisees to be treated as employees.