On Thursday, the Republican-led Senate committee on Health Education, Labor and Pensions held ahearing on joint employers. This follows the Republican-chaired House Education and Workforce committee's series of hearings held last June addressing the National Labor Relations Board's expected joint employer ruling, and a September hearing, and subsequent letter directive from the committee to the General Counsel of the NLRB demanding documents, communications and answers to questions related to the Board's plans on joint employer.
Hand-picked witnesses at each of these hearings forecast dire futures for their small and franchised businesses if the National Labor Relations Board changed its joint employer standard, calling the Board's expected move a "radical effort [that] would destroy the franchise model and American jobs." But in reality, it's big multi-national companies like McDonald's and Burger King and Walmart that have the most to lose, not small businesses or franchisees. The way these big companies see it, they should reap rewards while franchisees or subcontractors take on all the responsibility. Why is it bad for these smaller companies to have someone to share the liability for workers?
What's striking about the stretch of Congressional activity is its almost complete lack of connection to the reality of labor and employment laws in our country and how they apply (or don't apply) to businesses. Our labor and employment laws -- from the Fair Labor Standards Act creating basic minimum wage and overtime protections, to the Occupational Safety and Health Act, to anti-discrimination laws, to the Family & Medical Leave Act, to the National Labor Relations Act -- have since their inception defined covered employers to potentially include more than one employer.
The FLSA and NLRA have had their definitions since the 1930s; the FMLA explicitly holds more than one employer jointly responsible since its 1991 inception, for example. And while our labor and employment laws have different definitions of which entities can be held to be jointly responsible as employers, a worker can seek to claim against more than one so-called "joint employer" generally speaking if the two entities share the right to control the workplace in question.
There's nothing new about joint employment, and the U.S. Supreme Court, myriad court cases and the federal agencies charged with enforcing these laws have applied these concepts to a multiplicity of workplaces and businesses for the decades that the laws have been in effect. Farmworkers have recovered minimum wages from farm labor contractors and the growers that engage them for decades; garment workers too from the sweatshop operators and their jobbers. More recently, janitors have recovered unpaid overtime from big-box retailers when the smaller cleaning contractors they outsource to don't pay their workers. Staffing workers placed by one company to work on another's premises are seeking freedom from discrimination. Temp and staffing companies are explicitly covered along with the worksite companies under Family & Medical leave regulations, and OSHA has recently reinvigorated its long-standing enforcement in worksites with temp and staffing companies where health and safety violations proliferate.
A finding of joint employment responsibility is not automatic: the laws require that the facts show that the two or more entities share the right to control the work and the businesses in which the work is occurring. The rich history of these joint employer cases and the laws behind them are entrenched in our nation's labor and industrial policy, and businesses across the country have operated under this body of law for decades.
They are good policy, too. Without multiple employer accountability, in too many instances, corporate outsourcing can result in lack of responsibility for workplace conditions. Whether by employing multiple layers of contractors, using staffing or temp firms to supply workers, franchising, misclassifying employees as independent contractors, or other practices, outsourcing companies distance themselves from labor-intensive aspects of their businesses and in so doing, attempt to shift accountability for their workers elsewhere.
These employment arrangements are the reality of work today, but they should not spell the end of living wage jobs or business responsibility for the work and workers the companies can control. Congress should note these underlying policies and history when holding hearings and leading public discussions around joint employment and how we want outsourcing and franchising companies to manage the workplace conditions in their business. Companies' decisions to use a staffing or temp firm or outsource part of its business should not translate into an outsourcing of responsibility for the workers in that business. And requiring them to own up to the fact that they're the boss most certainly doesn't spell doom for small businesses.
Catherine Ruckelshaus is general counsel of the National Employment Law Project. Mike Munoz is the Coordinator of the National Staffing Workers Alliance.