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Pushing for Clarity: Joint Employer Issue Heats Up in Washington

Pushing for Clarity: Joint Employer Issue Heats Up in Washington

In communities across America, the hotel industry is a driving economic force, providing opportunities for exciting lifelong careers with upward mobility, fast-tracked promotions, workplace flexibility, and a chance to achieve the American Dream.

For many, the ultimate American Dream is to own your own business—a dream that the hotel industry has made possible for thousands of entrepreneurs through the franchise model. Today, three out of every five hotels are considered a small business. That’s why one of AHLA’s top priorities is to promote federal workforce policies that empower the entrepreneurial spirit and encourage business growth among small business owners.

Perhaps no issue has created more uncertainty and confusion for franchises and small business owners in recent years than the definition of “joint employer,” and what that means for hoteliers’ responsibilities and liabilities as employers.

For more than three decades, the joint employer standard was one of the cornerstones of labor law. Under this standard, an employer is responsible for an employee if they have “direct and immediate” control over their employment, such as the ability to hire and fire and determine pay. This standard worked well to provide employers with clarity about their legal obligations.

All that changed in 2015, when the National Labor Relations Board (NLRB) expanded the definition of what it means to be a joint employer in its Browning-Ferris Industries (BFI) decision. Under the BFI standard, a joint employer was anyone who exercised indirect, potential, or unexercised reserved control. As a result, employers were potentially liable for actions and activities of employees they did not directly employ. This decision had a chilling effect on the hotel industry, especially for franchises, who suddenly had uncertainty and confusion about whom they employ and are liable for under the law.

Several recent actions by the federal government on this issue have only added to the confusion. In November, the U.S. House of Representatives passed the Save Local Business Act, a bill that would reestablish the original “direct and immediate” joint employer standard. This legislation was a welcome step forward for the hotel industry, as we sought to bring clarity and certainty back to our nation’s labor laws. But, the legislation cannot become law until it is also passed by the Senate and signed by the President. AHLA continues to make codifying the pre-BFI joint employer standard a top legislative priority and will explore all options to get this signed into law.

Meanwhile, in December, NLRB reversed Browning-Ferris, ruling in the Hy-Brand case that a business must have a direct and immediate connection to the employees in question. Unfortunately, just two months later, NLRB vacated the Hy-Brand decision due to a conflict of interest with one of the Board members. This once again reinstated the 2015 BFI definition of joint employer, creating more angst within the small business community.

The constant ping-ponging back and forth on what it means to be a joint employer has only created more confusion, uncertainty, and frustration for hoteliers and other local and small business owners.

Fortunately, the U.S. Senate has the power to finally put an end to the chaos. By passing joint employer legislation, the Senate can codify the original definition of joint employer that has served us for decades. As the co-leader of the Coalition to Save Local Businesses, AHLA has joined a cross-section of industries representing thousands of local businesses in urging the Senate to pass joint employer legislation. We will continue to pressure the Senate to act.

We encourage you to add your 
voice to this ongoing conversation at 
savelocalbusinesses.com/take-action. Together, we can reestablish the traditional definition of joint employer and provide clarity and certainty to small business owners everywhere.

 

About the Author
Brian Crawford is senior vice president and head of government affairs at AHLA.

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