Since August, the NAM has been at the forefront of efforts to push back against the National Labor Relations Board’s (NLRB) highly anticipated decision in Browning-Ferris Industries, which created a new “joint employer” standard in federal labor law. This new standard turned 30 years of precedent on its head by stating that two companies are joint employers if the host employer has any indirect or potential control of the contracted entity’s employees. Previously, a company had to have actual or direct control over these employees.
With the stroke of a pen, the NLRB disrupted the economic and business models that represent a modernized, 21st-century workplace that includes temporary contracts, subcontracting and other practices that allow businesses to focus on their core competencies, which are all critical tenets of modern manufacturing facilities. For manufacturers who use subcontractors for services, such as payroll, janitorial, food, security and law enforcement, hiring and temporary worker placement, just to name a few, they will now be subjected to this new standard.
The NAM recognizes that the new joint-employer standard threatens most private-sector businesses that contract with another company or staffs out certain services. The application of the standard is potentially limitless, and in adopting this new ambiguous standard, the NLRB has made employers potentially liable for employees they do not even employ. The conflict the NLRB has created between a warped view of employer responsibilities and current business practice with decades of precedent needs to be resolved.
Manufacturers have been advocating a solution, and leaders in both the House and Senate have been working on a legislative fix. House Education and Workforce Committee Chairman John Kline (R-MN) and Senate Committee on Health, Education, Labor and Pensions Committee Chairman Lamar Alexander (R-TN) introduced identical legislation, the Protecting Local Business Opportunity Act, (H.R. 3459, S. 2015) to re-establish the old standard. Earlier this week, the NAM called on both the House and Senate to take action.
On Wednesday, Chairman Kline’s House Committee took the first step in pushing this legislation forward by favorably reporting the bill out of the committee. We expect the House will bring it up for general debate and consideration before the end of the year.
