Summary
Makes it harder for a company to be a 'joint employer' unless it has direct and immediate control over another company's workers.
What problem does this solve?
The rules for when two companies are considered 'joint employers' can be unclear, making one business responsible for workers it doesn't directly manage. This bill creates a strict test, stating a company is only a joint employer if it directly controls key job aspects like hiring, firing, and pay.
Who does this affect?
- Franchise businesses
- Contract and temporary workers
- Large corporations
What does this bill do?
Creates a strict test for joint employers
Changes the National Labor Relations Act to state that a company is only a 'joint employer' if it has direct, actual, and immediate control over another employer's workers.
Lists specific examples of control
Defines 'significant control' as actions like hiring, firing, setting pay and benefits, daily supervision, assigning work, or disciplining employees.
Applies new rule to wage and hour law
Uses the same strict 'joint employer' test for the Fair Labor Standards Act, which covers rules about minimum wage, overtime, and pay.
What is the real world impact?
•
Weakens worker protections
Makes it harder for workers at franchises or contracting firms to hold the larger parent company responsible for labor violations, like unpaid wages or preventing union organizing.
•
Reduces legal risk for large businesses
Protects large companies, such as franchisors, from being legally considered an employer of their franchisees' staff. This limits their responsibility for labor disputes and lawsuits.
When does this start?
This bill would go into effect as soon as it is signed into law.