Yesterday, the House Education and Workforce Committee approved H.R. 3441, the “Save Local Business Act of 2017” to rescind a convoluted Obama-era rule regarding joint-employers. For 30 years, joint-employers were defined as having “direct” control over their employees. However, in 2015 the National Labor Relations Board’s (NLRB) changed the definition as businesses that also exercise “indirect” control as well. The expansion of this definition means that many small business owners are no longer able to operate their businesses as they see fit. This change has created an atmosphere of uncertainty in the business community and its harmful effects -- such as higher costs for consumers -- continue to be felt across the country.
Data shows the NLRB rule has, and will continue to have a tremendous impact on the franchise industry, one of the most dependable sources of job creation in recent years. American Action Forum estimates that this rule could result in 1.7 million fewer jobs in the private sector, with 500,000 of those losses directly in the leisure and hospitality industry. The rule is actively hindering entrepreneurship and suppressing job opportunities and wage growth for low-income workers.
Today’s passage represents an important first step towards restoring certainty to our nation’s job creators. NTU was pleased to endorse this bill and is confident that should it become law will boost economic growth and provide relief for those affected by the NLRB rule.