House Passes Anti-Worker Bill that Weakens Workplace Protections

WASHINGTON – TODAY, the House of Representatives passed H.R. 3441, the so-called “Save Local Business Act”, by a vote of 242-181, largely on party lines.

The vote today was a blow for working people and their legal right to negotiate for higher pay and to secure the money they have earned. In recent years, employers have increasingly moved away from directly hiring employees in favor of using permatemps or subcontracting to reduce labor costs and liability. This means for many workers, the name of the company on the door of the building where they work may not be the name of the company that signs their paycheck. Labor and employment laws have long held that, in situations like these, where more than one employer has the right to control the terms and conditions of employment, multiple entities may be held liable.

“The so-called ‘Save Local Business Act’ amends the National Labor Relations Act and the Fair Labor Standards Act by establishing a new, narrower definition of ‘joint employer’ and effectively eliminates accountability for the entities actually calling the shots,” said Ranking Member Bobby Scott (VA-03). “The net effect will be that workers who seek to hold their employers accountable for violating wage and hour laws, unfair labor practices, or refusing to negotiate will lose under this bill.”

Even more alarming, under this bill, if two companies claim they are not employers, and if both fail to meet the new, narrower definition of “joint employer,” then the employee could be left with no legal employer to hold accountable. This means a court could find a worker is owed overtime pay, but there is no one left on the hook to pay for it.

“The Administration and this Congress have weakened workplace protections that keep Americans safe from discrimination at their jobs, make sure they receive fair pay, and provide additional opportunities to save for a secure retirement,” said Vice Ranking Member Suzanne Bonamici (OR-01). “Joint employer protections make sure that employers cannot escape liability for violating worker protection laws. This legislation leaves workers behind and could give a free pass to unscrupulous companies that violate labor laws.”

Contrary to its title, this bill actually hurts responsible businesses. The so-called “Save Local Business Act” insulates low-road construction contractors from liability when they cut costs by using subcontractors that steal workers’ wages, thereby hurting law-abiding businesses who compete against them. A national coalition of construction contractors has warned Congress that H.R. 3441 would, “create a standard that would surely accelerate a race to the bottom in the construction industry and many other sectors of the economy. It would further tilt the field of competition against honest, ethical businesses.”

“The joint employer standard defines who is responsible for the upholding employees’ rights and ensures that workers can hold the appropriate companies accountable for violating wage and hour laws or refusing to collectively bargain. Today, House Republicans voted to gut that standard completely. If this bill becomes law, large corporations will have immunity if their contractors violate workplace laws, even as they profit off the employees whose rights are being violated, said Workforce Protections Subcommittee Ranking Member Mark Takano (CA-41). “At a time when more and more working families are struggling to meet basic expenses and plan for the future, the Majority is once again stripping workers of the leverage they need to fight for fair wages and better workplaces.”

Furthermore, while this bill purports to help protect the independence of franchisees, legal experts point out that the “Save Local Business Act” will harm small franchisees by holding them accountable for their franchisors’ decisions. Under this bill, if the franchisor directs the franchisee to take actions that results in a violation, the franchisee would be forced to accept this shared control, without shared responsibility.  That’s a bad deal for franchisees.

While Republicans continue to systematically undermine workers’ rights, Democrats remain focused on raising the minimum wage, ensuring workers have safe workplaces, and access to schedules that work.  

To read a fact sheet on H.R. 3441, the “Save Local Business Act of 2017”, click here.

To more, read letters of opposition to H.R. 3441, click here.


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