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CEI Supports Defunding Obama's Joint Employer Standard in House Appropriations Bill

This week, the U.S. House Appropriations Committee will markup the Fiscal Year 2017 Labor, Health and Human Services, and Education Appropriations bill. CEI commends the committee for including a provision in the bill that would effectively defund the implementation of the National Labor Relations Board’s (NLRB) new joint employer standard. This new standard hinders the creation of tens of thousands of beneficial business relationships including franchise businesses, contractors, and temporary staffing agencies.

In August 2015, the NLRB unilaterally redefined the concept of joint employment. Under its new definition, companies may be held liable for labor violations committed by other employers with whom they contract — even if they do not exercise direct control over that company or its employees.

By exposing employers to liability for the practices of contractors, franchises, and temporary staffing agencies, the new NLRB standard will likely force companies to bring many functions in-house, take greater control of operations, or eliminate jobs, thus threatening entrepreneurship and business growth, as well as limiting job creation. It would jeopardize the future of franchise businesses, which have created jobs faster than other businesses in the last seven years, and endanger the jobs of the 3 million people who work for temporary staffing agencies.

Without defunding this new standard, many of the incentives to go into business for oneself will vanish. Many independent small business owners and entrepreneurs could lose the workplace flexibility and autonomy that made them want to start a business in the first place.

At a time of minimal economic growth, and with nearly 95 million Americans out of the workforce, now is not the time for a group of unelected NLRB bureaucrats to erect roadblocks that make operating or starting a business more difficult than necessary. 

The traditional joint employer standard has served all stakeholders well—workers, consumers, and employers—for decades. We urge Congress to reverse the NLRB’s new joint employer standard that hinders innovation, prohibits flexible work arrangements, and makes it much harder for entrepreneurs to start new businesses.

CEI's letter of support for defunding joint employer in House Labor Appropriations bill is here.