A bill passed last week by the House would make companies no longer liable for safety and other violations committed by their subcontractors.
The Save Local Business Act, sponsored by Rep. Bradley Byrne (R-Ala.), would reverse a 2015 National Labor Relations Board (NLRB) ruling that an employer is considered a joint employer with a subcontractor if it has “indirect” control over the terms and conditions of employment or has the “reserved authority to do so.”
The bill specifies that a company is only considered a joint employer if it "directly, actually and immediately" has control over essential terms and conditions of employment.
Republicans say the change would bring about a reasonable joint-employer standard. Democrats who opposed the bill said its narrow definition of joint-employer eliminates accountability for some companies.
Among the industry groups who lobbied for the bill was the International Franchise Association – although the NLRB's ruling specifically stated it did not cover franchisees.