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Save Local Business Act Clears Another Hurdle in Congress


Last Tuesday, the U.S. House of Representatives passed the Save Local Business Act by a 242 - 181 vote in favor of the legislation.  The legislation (H.R. 3441) would redefine the definition of "joint employer" under the National Labor Relations Act and the Fair Labor Standards Act and hold that a person or employer would be considered a joint employer only if it directly, actually, and immediately, and not in a limited manner exercised control over the seasonal terms and conditions of employment (such as hiring employees, discharging employees, determining individual rates of pay and benefits, day to day supervision of employees, assigning individual work schedules, positions, tasks, and administering employee discipline).

Readers might recall that the National Labor Relations Board ("NLRB") issued a somewhat controversial decision in 2015, Browning-Ferris, which held that an employer can be considered a joint employer with a franchisee, staffing agency, subcontractor, etc, it the employer has either direct or indirect control over that entity's terms and conditions of employment or has reserved authority to exercise such control. Under this expanded definition of joint employer, the NLRB made it more likely that employers would be considered to be joint employers with their business partners (thus exposing employers to unprecedented exposure of potential litigation).

At this point, the Save Local Business Act is still a ways off from becoming law.  The U.S. Senate will now debate and consider the legislation before Senators vote.  I think it is still likely that this legislation will become law (likely sooner rather than later) as Republicans have majority control of Congress and have even been able to pick up a few Democrats to support the bill.

Stay tuned.


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