OpenMarket: Labor and Employment

The National Labor Relations Board finalized a rule last week that will bring much needed relief and certainty to the franchise industry and other industries that follow a certain business model. In 2015, the NLRB unilaterally changed the definition of “joint employer,” a change that opened the franchise business model to liability -- and posed an existential threat to the franchise business model.

By far the most common criticism of minimum wages is that they cost jobs.

California’s Assembly Bill 5 (AB5) is intended to classify more independent contractors as formal employees. The goal is for workers to get higher wages and benefits, but thousands of workers are losing their jobs in other fields from journalism to entertainment to business consultants. Part of AB5’s problem is that it treats workers as either contractors or formal employees, but that is not an either/or question. The labor market is a wide-ranging spectrum, not a simple binary.

The House of Representatives is expected to vote this week on the Protecting the Right to Organize (PRO) Act. The legislation would essentially nullifies 28 states’ right to work laws, force employers to provide unions with employees’ personal information, codify “card-check” organizing, and change the definition of “joint employer” to make it easier to unionize contract workers and franchises.

Twenty four states rang in 2020 with minimum wage increases. Most of the increases are modest, so the tradeoffs will be, too. But there was curiously little discussion of those tradeoffs. The more than 50 increases that have just taken effect are all at the state and local level, but minimum wages will almost certainly be a significant campaign issue in 2020. Regardless of November’s election results, next year’s incoming Congress will likely attempt another increase next year.

The Competitive Enterprise Institute had a busy year in the labor and employment space. Much of the work focused on expanding worker freedom, ending wasteful subsidies, and promoting individuals’ right to earn a living. Below are selected examples of CEI’s work to promote employee freedom of choice and flexible work arrangements.

A major holdover case from the Obama-era National Labor Relations Board (NLRB), which acted as the litigation arm of organized labor, is finally resolved. On December 12, the NLRB approved a settlement with McDonald’s USA LLC. The settlement puts to bed a case brought by the Fight for $15 that alleged McDonald’s was a “joint employer” with a number of franchisees and was responsible for the separate business’s labor violations.

As taxpayers, we trust our locally elected officials to act as fiduciaries of our hard-earned dollars. However, it is well documented that the government frequently fritters away tax dollars on activity that serves no public purpose.

Chairman John Ring delivered the latest salvo in response to the manufactured “scandal” at the National Labor Relations Board (NLRB). Democrats, with help from the NLRB inspector general, have improperly accused members of the board of bogus conflicts of interest that have impeded the policymaking ability of the agency. These attacks are political, and have no factual basis.

On September 30th, Eugene Scalia was sworn in as the 28th Secretary of Labor. Last week, the Senate confirmed Scalia on a 53-44 vote. With about 15 months left in President Trump’s term, here are few actions the Labor Department can take to increase union financial transparency, cut down on federal construction costs, and study the impact of wage and hour laws.