Report: Joint Employer Labor Liability Puts Jobs, Opportunity at Risk

Obama administration labor regulators are vastly expanding employer liability by imposing new “joint employer” standards – and the negative impact on entrepreneurs and job opportunities could be huge. A short new primer by Competitive Enterprise Institute labor policy expert Trey Kovacs explains the changes put forward by regulators at the National Labor Relations Board, the impact on people’s livelihoods, and what Congress can do about it.

Key points:

  • The expanded joint employer standards will curtail entrepreneurship and job creation.
  • Employers can expect higher insurance costs and more lawsuits.
  • Franchise businesses and companies that rely on contractors and temporary staffing agencies will be hardest hit.
  • At least 40,000 small businesses will be put at risk.
  • Big Labor stands to benefit, as the expanded joint employer classification will ease union organizing drives and help entrench unions in a workplace.
  • Congress can step in to stop regulators from unilaterally re-writing the law with legislation to restore the traditional joint employer standard. Kovacs recommends going further by abolishing or at least reorganizing the politicized NLRB.

Under the NLRB’s new definition of joint employer, the upshot of an August 2015 ruling, companies can be held liable for labor violations committed by other employers with whom they contract, even if control over employment terms and conditions is far from joint.

View the report > NLRB’s New Joint Employer Standard Threatens Business Formation and Job Creation