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Nov 7, 2017
Press Release


WASHINGTON, D.C. - Congressman Kevin Cramer supported legislation today rolling back an Obama-era joint employer scheme that puts small businesses, particularly franchisees, in jeopardy.

Decisions such as hiring, work schedules, and pay raises all take place between an employer and employee. However, in 2015, the National Labor Relations Board (NLRB) intervened in the employer-employee relationship by putting direct liability on the employer for things that may occur by an independent contractor or franchisee. This new liability standard hurts working families and small businesses by blurring the lines of responsibility for decisions affecting the daily operations of local businesses across the country. 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.

“This ambiguous standard leads to more uncertainty for small businesses and puts them at risk of legal liability over the actions of employees they have no direct control over,” said Cramer. “This bill provides certainty and stability for employers and workers to ensure the little guy isn’t pushed out of business and the American dream remains strong.”

The Save Local Business Act (H.R. 3441) would define a joint employer as someone who exercises direct and immediate control of an employee’s terms and conditions of employment under the National Labor Relations Act. The definition would also apply to the Fair Labor Standards Act of 1938. All existing labor protections for workers remain under this legislation.   

According to the American Action Forum, the current joint employer scheme could result in 1.7 million fewer jobs.