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House Passes Legislation Narrowing Joint Employer Doctrine

One of the most pressing issues for employers and contractors is the joint employer doctrine.  This doctrine allows the NLRB and other agencies to consider one business the employer of another business’ employee if it had indirect or potential control over the second business’ employees.  What is indirect or potential control, you ask?  Therein lies the problem. While the NLRB decision that expanded this doctrine to its current state is still on appeal (Browning-Ferris Industries of California, 362 NLRB No. 186 (2015)), the House took matters into its own hands and recently passed the Save Local Business Act, H.R. 3441.  The Act’s summary provides that “a person may be considered a joint employer in relation to an employee only if such person directly, actually, and immediately, and not in a limited and routine manner, exercises significant control over the essential terms and conditions of employment,” thus significantly limiting those who may be considered joint employers (italics mine).  The Act, which has been sent to the Senate, would constitute a noteworthy win for small and large businesses if it passes the Senate and is signed into law by the President.

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