By: Jaclyn W. Hamlin, Esq.

On October 5, 2017, H.R. 3441, the “Save Local Business Act,” cleared its first hurdle when it passed the House Committee on Education and the Workforce. The bill, which would clarify the definition of “joint employer” under both the National Labor Relations Act (NLRA) and the Fair Labor Standards Act (FLSA), passed by a comfortable margin with 23 “yea” votes and 17 “nay” votes.

If passed and signed into law by the President, the bill would clarify that a “person” is a joint employer under both the NLRA and FLSA only where the employer in question “directly, actually, and immediately, and not in a limited and routine manner, exercises significant control over the essential terms and conditions of employment” in relation to an employee. According to the bill, such instances of control include hiring; discharging; determining individual rates of pay and benefits; conducting day-to-day supervision; assigning individual work schedules, positions and/or tasks; and administering discipline.  An entity whose relationship to a particular employee or group of employees is more attenuated would not be considered a joint employer under this standard.

In a fact sheet on the proposed legislation, the House Committee on Education and the Workforce argues that regulators and “activist judges” working during the previous Presidential administration have “discarded settled labor policy and blurred the lines of responsibility for decisions affecting the daily operations of local businesses across the country.” If enacted, the “Save Local Business Act” will walk back regulatory actions and administrative decisions tending to find joint employer status where an entity “indirectly” controlled or “potentially” impacted employees’ daily responsibilities and regular work environment.

The “Save Local Business Act” was introduced by Representative Bradley Byrne, R-AL, on July 27, 2017, and was referred to Committee on the same day. The Subcommittees on Workforce Protection and Health, Employment, Labor and Pensions held hearings in September.  The bill currently has 111 co-sponsors, including 108 Republicans and 3 Democrats.