The “Save Local Business Act,” introduced by Reps. Bradley Byrne (R-AL), Lou Correa (D-TX), and Henry Cuellar (D-TX), stipulates that to be considered a joint employer, two or more employers must have “actual, direct, and immediate” control over employees.
The definition had been changed in 2015 under the Obama Administration to say two or more employers can be considered joint employers for making a business agreement that “indirectly” or “potentially” impacts their employees’ day-to-day responsibilities and working environment.
The bill’s sponsors said the current definition discourages larger companies from contracting with smaller companies, and makes it harder for entrepreneurs to start a business, and could result in fewer jobs.
“Federal labor policies should be focused on benefiting workers and helping small businesses grow instead of creating barriers that limit opportunity,” Byrne said. “Under this bipartisan legislation, workers, and the businesses they work for, will be given much needed clarity and certainty. I am especially pleased our legislation has earned support from both sides of the aisle, and I am committed to continuing to build momentum as the bill moves through the legislative process.”
The Small Business and Entrepreneurship (SBE) Council came out in support of the legislation.
“Certain regulations and actions advanced under the previous Administration were particularly damaging to the entrepreneurial ecosystem,” Karen Kerrigan, president and CEO of the SBE Council, said. “The changes made to ‘joint employer’ is one of them. Furthermore, actions and changes pursued by other agencies at the state and federal level have created significant uncertainty and complexity for small businesses. There needs to be clear, bright lines that establish business autonomy and the ‘Save Local Business Act’ is a needed solution that will provide that for small businesses.”