Main Street in Jeopardy: The Expanding Joint Employer Threat to Small Businesses

Tuesday, June 21, 2016 - 12:15am
The concept of joint employment, that is, where two separate employers share responsibility and liability for the same employee, has long been recognized under multiple federal statutes, including the National Labor Relations Act (NLRA). For nearly three decades, the National Labor Relations Board (NLRB or Board), which enforces the NLRA, used a simple and clear standard for determining joint employer status, one that relied on “direct and immediate” control over fundamental terms and conditions of employment. This bright line test allowed for the expansion of successful business models, such as franchising and subcontracting, that have encouraged flexibility, specialization, and job growth. In 2015, however, the NLRB overturned its well-established standard, replacing it with a vague and sweeping new test that has caused turmoil and uncertainty for a wide range of employers. Unfortunately, the interest in expanding joint employer liability has spread to other federal agencies as well as state and local governments. Essentially, businesses across multiple industries may now find themselves liable for workplaces they don’t control and workers they don’t employ. Congress can, and must, take action to restore common-sense to this aspect of labor law.