In a victory for our national association, NAHB, and the small business community, the National Labor Relations Board (NLRB) voted on December 14 to overturn its 2015 ruling in the case of Browning-Ferris Industries. The 3-2 vote effectively overturns an Obama-era decision that radically expanded the traditional definition for joint employer status and once again restores the sensible criteria that has worked so well for the economy for more than 30 years.
The Browning-Ferris decision made the standard for joint employment so broad and vague that an employer could be held liable for the labor and employment practices of independent contractors and subcontractors over which they have no direct control. By rescinding the Browning-Ferris standard, the NLRB has restored the traditional definition of joint employment in which a company must exercise ‘direct and immediate control’ over a worker in a business-to-business relationship. Home building firms and other small businesses who work closely with subcontractors and third-party vendors will now have more certainty and clarity regarding their employment decisions.
NAHB will continue to urge the Senate to swiftly approve H.R. 3441, the Save Local Business Act, bipartisan legislation that passed the House in November and on which NAHB Chairman Granger MacDonald testified in September. The bill offers a more permanent legislative fix that codifies this standard under both the National Labor Relations and Fair Labor Standards Acts.