10.04.17

Republicans Pass Bill Dismantling Worker Protections

WASHINGTON – TODAY, the Committee on Education and the Workforce held a markup on H.R. 3441, the so-called “Save Local Business Act.” The bill creates a new, narrow definition of a joint employer under the National Labor Relations Act (NLRA) and the Fair Labor Standards Act (FLSA), limiting whom workers may hold responsible for wage theft or unfair labor practices when there are multiple employers who control terms and conditions of employment. Attacks on worker rights under the NLRA have been the subject of 36 committee hearings and markups since the majority took control in 2011. 

Ranking Member Bobby Scott (VA-03) offered an amendment to address a chaotic situation the bill would create, possibly leaving employees without any employer to hold liable under both the NLRA and the FLSA. Under the bill, if two companies claim that they are not employers, and both fail to meet the new, narrower definition under this bill, then the employee could be left with no legal employer to hold accountable.

“A judge could find that an employee wasn’t paid overtime and also that nobody owes back pay for the overtime payments. H.R. 3441 could set off chaos and impose needless harms to employees navigating our legal system,” said Ranking Member Scott. “I appreciate that the majority has apparently noticed this and attempted to deal with the problem. I understand the bill will be changed with an amendment in the form of a substitute, which creates even more confusion.” 

Representative Bradley Byrne (AL-01), lead sponsor of the bill, declined to speculate on the impact of the Majority’s recent changes to the bill, stating the courts would have the final say.

Representative Donald Norcross (NJ-01) offered an amendment to replace the bill’s narrow standard for joint employer with the existing standards under the NLRA. This amendment would ensure workers can negotiate with all parties that control the employment relationship and removed provisions that amended the FLSA that would have blocked recourse for wage theft and child labor violations. This was the focus of a recent paper by the Center for American Progress.

All amendments to reinstate workers’ rights into the bill were rejected by Republicans on a party line vote.

Democrats also sought to protect small businesses from provisions of the bill, which despite its name, would leave small businesses, such as franchisees, open to liability for direction provided by their franchisors. Under H.R. 3441, large, powerful franchisors have a blank check to dictate small franchisees’ employment practices, while at the same time leaving franchisees on the hook for any legal violations.

Vice Ranking Member Suzanne Bonamici (OR-01) offered an amendment that would have ensured if a franchisee acted at the direction of its franchisor, and that action resulted in a violation of the NLRA or FLSA, the franchisor could not hide behind the bills’ narrow definition of joint employer to shirk liability. This amendment to protect mainstream businesses was also rejected by Republicans on a party line vote.

Throughout the hearing, Democrats urged Republicans to abandon their efforts to advance legislation that systematically undermines workers’ rights, and instead focus on legislation to improve wages and workers’ rights. Representative Frederica Wilson (FL-24) offered H.R. 15, the Raise the Wage Act, as an amendment to the “Save Local Businesses Act”. This legislation would raise the federal minimum wage to $15.00 by 2024 and give more than 41 million Americans a pay increase.

The "Save Local Busniesses Act" passed on a party line vote 23 to 17. 

 

FULL OPENING STATEMENT: Ranking Member Bobby Scott (VA-03)

Organizations in to Opposition to “Save Local Businesses Act”: Economic Policy Institute,  North America’s Building Trades Unions, International Brotherhood of Teamsters, Farmworker Justice, NAACP Legal Defense Fund

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