House Passes Joint Employer Bill, Providing Certainty for Small Businesses

Filed in Capitol Hill, Labor, Safety and Health by on November 7, 2017 1 Comment

trowelNAHB today commended the House for passing the bipartisan Save Local Business Act, legislation that would amend the National Labor Relations Act and Fair Labor Standards Act to restore a common-sense joint employer standard for home building firms and other small businesses.

“Under current law, it is possible for a home builder to be considered a joint employer through such a basic business act as setting the work schedule of their subcontractor,” said NAHB Chairman Granger MacDonald. “This bill would reinstate the sensible criteria that has worked for the American business community for more than 30 years and provide legal certainty for all business owners.”

In 2015, the National Labor Relations Board (NLRB) overturned decades of precedence in the case of Browning-Ferris Industries of California Inc. by affirming that a company could be considered a joint employer if it has indirect control or the potential to determine the key terms of an employee’s employment, including hiring and firing, supervision, scheduling and the means and method of employment.

The NLRB left open-ended the question of what can be deemed indirect control and just how much of it could legally constitute joint employment, causing confusion and uncertainty for the housing and small business community.

“Since the indirect test is so vague and non-specific, the NLRB has not excluded the possibility that a home building firm could be found to be joint employers of its subcontractors if it merely asked for additional subcontractors to complete a job that is running behind schedule,” said MacDonald.

This is especially problematic for the housing industry, given that most home building companies employ fewer than 10 workers and rely on an average of 22 subcontractors to complete a home.

The Save Local Business Act offers a common-sense solution to the uncertainty generated since the NLRB ruling by proclaiming that a company may be considered a joint employer of a worker only if it “directly, actually, and immediately” exercises significant control over the primary elements of employment.

“By codifying this definition, the legislation eliminates the uncertainty that has threatened to upend the residential construction sector and provides employers with a clear standard for joint employment,” said MacDonald. “We urge the Senate to promptly introduce similar legislation.”

 

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  1. HArry Crowell says:

    Residential building necessitates we hire many subcontractors. they all depend on a schedule to be able to be on the job at proper times. It is the contractors job to be sure all subs are on time in reporting to the worksite and doing their jobs in a timely manner.
    without these proper controls in place the jobs would all be in a mess for every working person and subcontractor.
    these people are not on the contractors payroll but the contractor is responsible for the production schedules and shoul;d not be classed as their employer.

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