Joint Employer bill: Republicans say nobody’s responsible for wage theft

WASHINGTON—Brushing aside protests from workers, the Economic Policy Institute, unions, contractors, and House Democrats, the chamber’s ruling Republicans pushed through an anti-worker “Joint Employer” bill on November 7, 242-181.

Eight Democrats, led by Rep. Henry Cuellar of Texas, joined all 234 voting Republicans in backing it, The other 181 Democrats voted no. Cuellar was the sole Dem to speak for it.

The so-called “Save Local Business Act” (HR3441) would basically say that a franchisor—think McDonald’s corporate headquarters—is not responsible for labor law-breaking by its franchise-holder—think your local McDonald’s restaurant—even when the parent firm controls virtually everything at the local outlet.

The workers, their allies, and Democratic lawmakers said the bill is so broad workers could face the situation where if their employer shorts their paychecks, or breaks job safety or health laws, or if they’re trying to bargain a contract, there would be literally nobody on the other side of the table. The franchisor and the franchise-holder could each evade responsibility, they said.

And that could affect an estimated 24 million workers nationwide, or one of every seven, the Economic Policy Institute told lawmakers.

The Teamsters, EPI, the Auto Workers, the Service Employees, the Steelworkers, North America’s Building Trades, the United Food and Commercial Workers, and the AFL-CIO were among the unions opposing HR3441. Other unions, such as AFSCME and the Teachers, signed on to a joint letter from 300 groups nationwide against it.

“The bill redefines the term ‘employer’ so narrowly many workers will have no remedy when employers violate wage laws or their rights to organize and bargain collectively,” Teamsters President Jim Hoffa said. HR3441 “will encourage ‘gaming the system’ so no one exercises enough control” over a workplace “to be liable as an employer” for breaking or following labor law, including the National Labor Relations Act and wage and hour law.

EPI said the bill, pushed by notoriously anti-worker Rep. Bradley Byrne, R-Ala., would leave small businesses “on the hook” for corporate decisions they can’t control.

“Given the realities of the modern workplace, in which employees often find themselves subject to more than one employer, working people deserve a joint employer standard that guarantees their rights and protections under basic labor and employment laws.” HR3441 “makes it nearly impossible for workers whose wages are stolen or who are fired for supporting a union to get justice.”

Rep. Mark Takano, D-Calif., gave colleagues a real-life example of what HR3441 could do. The beneficiary was the monster anti-worker, anti-union retailer, Walmart.

“From 2001 to 2013, Walmart was contracting with three warehouses” in his hometown, Riverside, Calif., “and those warehouses contracted out their staffing to a company accused of committing egregious wage and hour law violations.

“Thanks to the Fair Labor Standards Act joint employer standard, 1,700 warehouse workers were able to reach a $22 million settlement to collect the pay they were owed from their employer. Under this bill, they would likely have gotten nothing.”

Building Trades President Sean McGarvey wrote lawmakers that HR3441 would only encourage “low-road contractors” into ever more law-breaking and shorting their workers.

Those contractors “are becoming increasingly skilled in shielding themselves from legal liabilities through layers of subcontractors. Contractors use subcontractors or labor brokers that either pay their employees off the books or intentionally misclassify” workers as “independent contractors” unprotected by labor laws, including wage and hour laws, he wrote.

The GOP legislation “would have the unintended consequence of promoting a low-road contracting model in which those who willfully commit labor violations are unaccountable, to the disadvantage of law-abiding employers and their employees,” McGarvey pointed out.

“I have fought to raise wages for over two decades for workers,” said Rep. David Norcross, D-N.J., an Electrical Worker and former Building Trades president in South Jersey. “This bill lets corporations keep wages low by subcontracting out their work. They are subcontracting their conscience to put profits over people.

“This bill makes it nearly impossible for workers to hold temporary staffing agencies responsible for unfair labor practices or wage theft. It denies employees a voice in the workplace. It prevents workers from joining unions, collective bargaining, which go ultimately to help raise wages.”

Rep. Bobby Scott, D-Va., top Democrat on the House Education and the Workforce Committee—which had approved the “small business” bill on a 23-17 party-line vote – laid the blame squarely on the GOP and especially on its business backers.

“My Republican colleagues say the law is ambiguous and we must act to save small businesses. The law is not ambiguous. They just don’t like it because it holds businesses responsible and forces them to bargain with unions. This bill is an assault on workers,” he said.