On House Republicans’ Bill to Take Away ‘Joint Employment’ Legal Protections from Outsourced Workers

Washington, DC—The following is a statement from Christine Owens, executive director of the National Employment Law Project, on the introduction of a House bill to weaken legal definitions of “joint employer” and water down legal protections for workers in contracted jobs:

“Most of us think that a company calling the shots on what’s going on in a workplace should be accountable for how the workers doing its business are treated—no matter what the company chooses to call the workers or how it classifies them. That means that when a company contracts out work to a staffing firm or other labor subcontractor while retaining control over the essential terms and conditions of the work, it should share responsibility for the workers.

“When workers in these contract arrangements aren’t paid what they’re owed, they shouldn’t have to navigate a legal maze to recover their lost wages, or even worse, risk not being paid at all if the companies are playing a game of hot potato when it comes to who is responsible for obeying the law. They should be able to recover from the companies with power over their working conditions—and the companies can duke out among themselves how they’re going to split costs. Similarly, when a company that contracts out its work retains the authority to determine critical terms of employment, it shouldn’t be able to hide behind a legal façade to avoid negotiating with workers who’ve voted to form a union; it should be at the bargaining table.

“The notion that companies empowered to control working conditions also must bear responsibility for them is what the legal concept of joint employment is all about. And this longstanding principle is even more important now than ever before, with all the changes in how businesses structure their employment relationships.

“Unfortunately, Rep. Virginia Foxx (R-NC) and other members of the House Education and the Workforce Committee took a sledgehammer to that principle today, introducing a bill that aims to erase this common-sense principle from two of our nation’s bedrock labor laws: the Fair Labor Standards Act and the National Labor Relations Act. The bill rewards companies seeking to shirk their responsibilities to their hard-working employees.

“The House bill would upend nearly a century of well-established ‘joint employer’ standards in our nation’s labor and employment laws. Most of these laws have had these employer definitions since their passage; corporations have been operating under these definitions since the 1930s. There’s good reason why our laws recognize that more than one employer may be responsible for how workers are treated: doing otherwise would allow companies to benefit from workers’ labor while shirking any responsibility to them. Joint employment improves compliance by ensuring that corporations can’t skirt the law simply by outsourcing responsibility for their workers.

“The bill would undercut a carefully considered NLRB decision in the Browning-Ferris case, where the company temped out 280 of its recycling worker positions, retained significant control over workplace operations, but then left the staffing company on its own to negotiate with the workers when they wanted to form a union. If workers come together to bargain, they should be able to bargain with the employer who’s really calling the shots.

“Perhaps even more radical and alarming, the House bill significantly narrows who’s responsible for child labor and minimum wage and overtime pay violations. If the staffing company, temp firm, or subcontractor uses child labor or cheats the workers out of wages or overtime pay owed, the company at the top that’s calling the shots should not be allowed to hide behind the subcontractor to escape responsibility for those illegal practices, and leave the workers who’ve been wronged holding the bag.

“Let’s be clear: There’s nothing inherently wrong with contracting out, especially when it’s done with above-board companies. Nor are companies and their contractors always joint employers. Nothing in the laws in their current form, or in court and agency decisions interpreting them, opens up the door to wholesale joint-employer status in every workplace that uses contract labor.

“Today’s bill takes a slash-and-burn approach that would undermine protections for millions of workers in the ‘contracted out’ economy. It would mean greater risk of labor violations and economic insecurity for workers in a wide range of industries in which contracting out is commonly practiced—construction, agriculture, garment, janitorial, home care, delivery and logistics, warehousing, retail, temp and staffing, and manufacturing.

“Wage theft and other workplace dangers are prevalent in many of these jobs, and when the companies calling the shots still deny legal responsibility for their workers and point the finger at someone else, it’s clear why we need joint employer responsibility.”

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