Save Local Business Act advances in the House

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As previously discussed, members of the United States House of Representatives introduced the Save Local Business Act (H.R. 3441) in July 2017. The purpose of the bill is to amend Section 2(2) of the National Labor Relations Act (29 U.S.C. 152(2)) and Section 3(d) of the Fair Labor Standards Act (29 U.S.C. 203(d)). The Save Local Business Act provides that a person may be considered a joint employer in relation to an employee only if such person directly, actually, and immediately, and not in a limited and routine manner, exercises significant control over the essential terms and conditions of employment. This includes hiring employees, discharging employees, determining individual employee rates of pay and benefits, day-to-day supervision of employees, assigning individual work schedules, positions, and tasks, and administering employee discipline). Upon introduction, the bill was initially referred to the House Committee on Education and the Workforce.

The bill, co-sponsored by Republicans and Democrats, is a proposal to combat the National Labor Relations Board’s 2015 joint employer ruling that expanded potential liability to companies and franchisors for labor law violations committed by their subcontractors or franchisees.  On Sept. 13, 2017, the House Subcommittee on Workforce Protections and the House Subcommittee on Health, Employment, Labor, and Pensions held a joint legislative hearing on the Save Local Business Act. During the session, members of the subcommittees heard from business owners and legal experts on the economic concerns and detrimental impact of the NLRB’s joint employer ruling. 

House members critical of the Save Local Business Act contend that it will reduce the ability for workers to bring Equal Pay Act claims or deny employees the right to join and form a union or to bargain with an employer. Proponents of the bill state that the bill does not change any current laws preventing wage theft nor does it take away any substantive protections from any workers. Rather, they claim it defines the employer relationship and clarifies that the proper employer for bargaining is the employer that actually establishes the terms and conditions of employment instead of an affiliated entity like a franchisor.

On Oct. 4, 2107, the House Education and Workforce Committee voted 23-17 to send the Save Local Business Act bill to the floor for a full vote. As of this writing, the bill currently has over 111 co-sponsors, including bipartisan support from three Democrats. Sponsors of the bill have indicated their commitment to work to gain momentum for the bill’s passage this Congressional session.


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