House Panel Approves Joint Employer Bill

Posted November 6, 2015 at 12:42 pm

The U.S. House Education and the Workforce Committee approved a bill that would amend the National Labor Relations Act by limiting joint employer findings to situations where two or more entities share control over employees that is “actual, direct and immediate.”

On a 21-15 vote, the committee agreed to approve a substitute version of H.R. 3459, the Protecting Local Business Opportunity Act, which was introduced in the House by Committee Chairman Rep. John Kline (R-MN) in September. The substitute version sent to the full House made only one minor change in the wording of Kline's bill.

The legislation was introduced to answer the National Labor Relations Board's recent decision to expand joint employer standards under the NLRA. In August, the NLRB held 3-2 in Browning-Ferris Industries of California Inc., that a company can be the joint employer of workers provided by another organization if the two firms share or codetermine matters governing the essential terms and conditions of employment of the employees in question.

The NLRB majority said that, “The Board may find that two or more entities are joint employers of a single workforce if they are both employers within the meaning of the common law, and if they share or codetermine those matters governing the essential terms and conditions of employment.”

The board said direct, indirect and potential control over working conditions are all relevant to determining joint employer status. Kline introduced H.R. 3459 on Sept. 9, and Senate Health, Education, Labor and Pensions Committee Chairman Lamar Alexander (R-TN) filed S. 2015 the same day. Both bills would preclude finding two or more organizations to be joint employers under the NLRA unless each of them “shares and exercises control over essential terms and conditions of employment and such control over these matters is actual, direct and immediate.

The House Education and the Workforce Committee will send a report on H.R. 3459 to the full House. The Senate HELP Committee held a hearing in October on S. 2015, but has not yet marked up Alexander's bill.