HR Policy Backs Traditional Joint Employer Liability Standard

May 14, 2021

The Association joined several other business groups in a letter to Congress that voiced strong support for the “Save Local Business Act,” which would limit joint employer liability based on traditional labor and employment law standards. 

The bill would amend the National Labor Relations Act and the Fair Labor Standards Act to limit joint employer liability to situations in which an employer exercises direct, actual, and immediate control over employees’ essential terms and conditions of employment. 

The letter notes that “this legislation comes at a critical time in the economic recovery when so many small businesses are emerging from the COVID-19 pandemic and are seeking legal clarity to help them grow their businesses, create jobs, serve their communities, and meet local, state, and federal obligations to their employees, customers, and the general public.” 

Outlook:  The same version of the bill passed the Republican House in 2017—largely along party lines—but did not receive a floor vote in the Senate.  Consideration by the current Democratic Congress is highly unlikely. The reintroduction of the bill comes as the Department of Labor has withdrawn a Trump-era joint employer rule that created a standard largely similar to that of the bill.  It is likely that the Department of Labor will issue its own regulation expanding joint employer liability sometime in the future.