[House Report 119-422]
[From the U.S. Government Publishing Office]
119th Congress } { Report
HOUSE OF REPRESENTATIVES
1st Session } { 119-422
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SAVE LOCAL BUSINESS ACT
_______
December 30, 2025.--Committed to the Committee of the Whole House on
the State of the Union and ordered to be printed
_______
Mr. Walberg, from the Committee on Education and Workforce, submitted
the following
R E P O R T
together with
MINORITY VIEWS
[To accompany H.R. 4366]
The Committee on Education and Workforce, to whom was
referred the bill (H.R. 4366) to clarify the treatment of 2 or
more employers as joint employers under the National Labor
Relations Act and the Fair Labor Standards Act of 1938, having
considered the same, reports favorably thereon with an
amendment and recommends that the bill as amended do pass.
The amendment is as follows:
Strike all after the enacting clause and insert the
following:
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Save Local Business Act''.
SEC. 2. CLARIFICATION OF JOINT EMPLOYMENT.
(a) National Labor Relations Act Amendments.--Section 2(2) of the
National Labor Relations Act (29 U.S.C. 152(2)) is amended--
(1) by striking ``The term `employer''' and inserting ``(A)
The term `employer'''; and
(2) by adding at the end the following:
``(B) An employer may be considered a joint employer of the employees
of another employer only if each employer directly, actually, and
immediately, exercises significant control over the essential terms and
conditions of employment of the employees of the other employer, such
as hiring such employees, discharging such employees, determining the
rate of pay and benefits of such employees, supervising such employees
on a day-to-day basis, assigning such employees a work schedule,
position, or task, or disciplining such employees.''.
(b) Fair Labor Standards Act of 1938 Amendments.--Section 3(d) of the
Fair Labor Standards Act of 1938 (29 U.S.C. 203(d)) is amended--
(1) by striking ```Employer' includes'' and inserting ``(1)
`Employer' includes''; and
(2) by adding at the end the following:
``(2) An employer may be considered a joint employer of the employees
of another employer for purposes of this Act only if each employer
meets the criteria set forth in section 2(2)(B) of the National Labor
Relations Act (29 U.S.C. 152(2)(B)) except that, for purposes of
determining joint-employer status under this Act, the terms `employee'
and `employer' referenced in such section shall have the meanings given
such terms in this section.''.
Purpose
To amend the National Labor Relations Act (NLRA) and the
Fair Labor Standards Act (FLSA) to provide a commonsense
standard for determining whether a joint employment
relationship exists in order to provide clarity and consistency
in this area of the law and to safeguard the independence of
businesses, especially small businesses like franchisees and
subcontractors.
Committee Action
113TH CONGRESS
Second Session--Hearings
On June 24, 2014, the Subcommittee on Health, Employment,
Labor, and Pensions (HELP) held a hearing titled ``What Should
Workers and Employers Expect Next from the National Labor
Relations Board?'' Witnesses were Mr. Andrew F. Puzder, CEO,
CKE Restaurants Holdings, Inc., Carpinteria, CA; Mr. Seth H.
Borden, Partner, McKenna Long & Aldridge, New York, NY; Mr.
James B. Coppess, Associate General Counsel, AFL-CIO,
Washington, DC; and Mr. G. Roger King, Of Counsel, Jones Day,
Columbus, OH. Witnesses discussed upcoming National Labor
Relations Board (NLRB or Board) cases as well as Board policy
and cited changes to the joint employer standard as one of the
most significant and controversial issues before the Board.
On September 9, 2014, the HELP Subcommittee held a hearing
titled ``Expanding Joint Employer Status: What Does It Mean for
Workers and Job Creators?'' Witnesses were Mr. Todd Duffield,
Shareholder, Ogletree, Deakins, Nash, Smoak & Stewart, Atlanta,
GA; Mr. Clint Ehlers, President, FASTSIGNS of Lancaster and
Willow Grove, Lancaster and Willow Grove, PA, testifying on
behalf of the International Franchise Association; Mr. Harris
Freeman, Professor, Western New England University School of
Law, Springfield, MA; Ms. Catherine Monson, Chief Executive
Officer, FASTSIGNS International, Inc., Carrollton, TX,
testifying on behalf of the International Franchise
Association; and Mrs. Jagruti Panwala, owner of hotel
franchises, Bensalem, PA. Witnesses spoke about how an expanded
joint employer standard would negatively impact franchises and
other small businesses.
114TH CONGRESS
First Session--Hearings
On August 25, 2015, the HELP Subcommittee held a field
hearing titled ``Redefining `Employer' and the Impact on
Alabama's Workers and Small Business Owners'' in Mobile,
Alabama. Witnesses were Mr. Marcel Debruge, Burr and Forman
LLP, Birmingham, AL; Mr. Chris Holmes, CEO, CLH Development
Holdings, Tallahassee, FL; and Col. Steve Carey, Owner and
Operator, CertaPro Painters of Mobile and Baldwin Counties,
Daphne, AL, testifying on behalf of the Coalition to Save Local
Businesses and the International Franchise Association.
Witnesses testified that the new joint employer standard would
threaten the independence of small businesses in Alabama and
deter franchisors from licensing new franchisees.
On August 27, 2015, the HELP Subcommittee held a field
hearing titled ``Redefining `Employer' and the Impact on
Georgia's Workers and Small Business Owners'' in Savannah,
Georgia. Witnesses were Mr. Jeffrey M. Mintz, Shareholder,
Littler Mendelson, P.C., Atlanta, GA; Mr. Kalpesh ``Kal''
Patel, President and COO, Image Hotels, Inc., Pooler, GA; Mr.
Alex Salguerio, Savannah Restaurants Corp., Savannah, GA; and
Mr. Fred Weir, President, Meadowbrook Restaurant Company Inc.,
Cumming, GA, testifying on behalf of the Coalition to Save
Local Businesses and the International Franchise Association.
Witnesses testified the new joint employer standard would hurt
small business growth in Georgia and create barriers to entry
for potential franchise owners.
On September 29, 2015, the HELP Subcommittee held a
legislative hearing on H.R. 3459 (114th Congress), the
Protecting Local Business Opportunity Act. Witnesses were Mr.
Ed Braddy, President, Winlee Foods, LLC, Timonium, MD,
testifying on behalf of himself and the National Franchisee
Association; Mr. Kevin Cole, CEO, Enniss Electric Company,
Manassas, VA, testifying on behalf of the Independent
Electrical Contractors; Mr. Charles Cohen, Senior Counsel,
Morgan, Lewis & Bockius, LLP, Washington, DC; Ms. Mara Fortin,
President and CEO, Nothing Bundt Cakes, San Diego, CA,
testifying on behalf of herself and the Coalition to Save Local
Businesses; Mr. Michael Harper, Professor, Boston University
School of Law, Boston, MA; and Dr. Anne Lofaso, Professor, West
Virginia University College of Law, Morgantown, WV. Witnesses
testified that H.R. 3459 would restore the joint employer
standard that had worked well for workers and business owners
for decades and would protect opportunities for small business
growth.
First Session--Legislative Action
On September 9, 2015, then-Committee on Education and the
Workforce (Committee) Chairman John Kline (R-MN) introduced
H.R. 3459 (114th Congress), the Protecting Local Business
Opportunity Act, with Representatives David P. Roe (R-TN), Tim
Walberg (R-MI), Virginia Foxx (R-VA), Todd Rokita (R-IN), Joe
Wilson (R-SC), Hunter D. Duncan (R-CA), Glenn Thompson (R-PA),
Matt Salmon (R-AZ), Brett Guthrie (R-KY), Lou Barletta (R-PA),
Joseph J. Heck (R-NV), Luke Messer (R-IN), Bradley Byrne (R-
AL), Earl L. ``Buddy'' Carter (R-GA), Mike Bishop (R-MI), Glenn
Grothman (R-WI), Steve Russel (R-OK), Carlos Curbelo (R-FL),
Rick W. Allen (R-GA), Steve Chabot (R-OH), Blaine Luetkemeyer
(R-MO), Vicky Hartzler (R-MO), Jason Smith (R-MO), Cresent
Hardy (R-NV), and Stephen Knight (R-CA) as original cosponsors.
Recognizing the threat to small businesses posed by the NLRB's
August 2015 decision in Browning-Ferris Industries of
California, Inc. (Browning-Ferris), the legislation amended the
NLRA to restore the long-held standard that two or more
employers can only be considered joint employers for purposes
of the NLRA if each shares and exercises control over essential
terms and conditions of employment and such control over these
matters is actual, direct and immediate.
On October 28, 2015, the Committee considered H.R. 3459 in
legislative session and reported it favorably, as amended, to
the House of Representatives by a recorded vote of 21-15.
Representative Carter offered an amendment in the nature of a
substitute, making a technical change, which was adopted by
voice vote.
115TH CONGRESS
First Session--Hearings
On February 14, 2017, the HELP Subcommittee held a hearing
titled ``Restoring Balance and Fairness to the National Labor
Relations Board.'' Witnesses criticized decisions of the NLRB
during the Obama administration, including the expanded joint
employer standard. Witnesses were Ms. Reem Aloul, BrightStar
Care of Arlington, Arlington, VA, testifying on behalf of the
Coalition to Save Local Businesses; Ms. Susan Davis, Partner,
Cohen, Weiss and Simon, LLP, New York, NY; Mr. Raymond J.
LaJeunesse, Jr., Vice President, National Right to Work Legal
Defense and Education Foundation, Springfield, VA; and Mr. Kurt
G. Larkin, Partner, Hunton & Williams LLP, Richmond, VA.
On July 12, 2017, the Committee held a hearing titled
``Redefining Joint Employer Standards: Barriers to Job Creation
and Entrepreneurship.'' Witnesses were Mr. Michael Harper,
Professor, Boston University School of Law, Boston, MA; Mr.
Richard Heiser, Vice President, FedEx Ground Package System,
Inc., Chicago, IL; Mr. G. Roger King, Senior Labor and
Employment Counsel, HR Policy Association, Washington, DC; Mr.
Jerry Reese II, Director of Franchise Development, Dat Dog, New
Orleans, LA, testifying on behalf of the Coalition to Save
Local Businesses; Ms. Catherine K. Ruckelhaus, General Counsel,
National Employment Law Project, New York, NY; and Ms. Mary
Kennedy Thompson, Chief Operating Officer of Franchise Brands,
Dwyer Group, Waco, TX, testifying on behalf of the
International Franchise Association. Witnesses testified about
the importance of reigning in expanded joint employer
standards.
On September 13, 2017, the HELP and Workforce Protections
subcommittees held a joint legislative hearing on H.R. 3441
(115th Congress), the Save Local Business Act. Witnesses were
Mr. Zachary D. Fasman, Partner, Proskauer Rose LLP, New York,
NY; Ms. Tamra Kennedy, President, Twin Cities T.J.'s Inc.,
Roseville, MN, testifying on behalf of the Coalition to Save
Local Businesses; Mr. Granger MacDonald, Chief Executive
Officer, The MacDonald Companies, Kerrville, TX, testifying on
behalf of the National Association of Home Builders; and Mr.
Michael Rubin, Partner, Altshuler Berzon LLP, San Francisco,
CA. Witnesses testified that H.R. 3441 clarifies the joint
employer standard used under both the NLRA and the FLSA and
benefits workers and business owners.
First Session--Legislative Action
On July 27, 2017, then-Subcommittee on Workforce
Protections Chairman Bradley Byrne (R-AL) introduced H.R. 3441,
the Save Local Business Act, with 29 original cosponsors. The
bill amended the NLRA and the FLSA to provide that two or more
employers can only be considered joint employers if each shares
and exercises control over essential terms and conditions of
employment and if such control over those matters is actual,
direct, and immediate.
On October 4, 2017, the Committee considered H.R. 3441 in
legislative session and reported it favorably, as amended, to
the House of Representatives by a recorded vote of 23-17.
Representative Byrne offered an amendment in the nature of a
substitute, making technical changes. The amendment was adopted
by voice vote. On November 7, 2017, H.R. 3441 passed the House
of Representatives by a recorded vote of 242-181.
117TH CONGRESS
Legislative Action
On May 13, 2021, Representative James Comer (R-KY)
introduced H.R. 3185 (117th Congress), the Save Local Business
Act, with 54 original cosponsors. The bill set the standard by
which a worker may be considered employed by a joint employer
under the NLRA and the FLSA.
118TH CONGRESS
First Session--Hearing
On December 11, 2023, the HELP Subcommittee held a hearing
titled ``Protecting Workers and Small Businesses from Biden's
Attack on Worker Free Choice and Economic Growth'' to examine
solutions to protect small businesses, including regarding the
joint-employer standard. Witnesses were Mr. G. Roger King,
Senior Labor and Employment Counsel, HR Policy Association,
Washington, DC; Mr. Matthew Haller, President and CEO,
International Franchise Association, Washington, DC; Mr. F.
Vincent Vernuccio, President, Institute for the American
Worker, Hamilton, VA; and Mr. Richard Griffin, Of Counsel,
Bredhoff and Kaiser, Washington, DC.
First Session--Legislative Action
On April 25, 2023, Representative James Comer (R-KY)
introduced H.R. 2826 (118th Congress), the Save Local Business
Act, with 61 original cosponsors. The bill set the standard by
which a worker may be considered employed by a joint employer
under the NLRA and the FLSA.
On November 9, 2023, Representative John James (R-MI)
introduced H.J. Res. 98 (118th Congress), Providing for
congressional disapproval under chapter 8 of title 5, United
States Code, of the rule submitted by the National Labor
Relations Board relating to ``Standard for Determining Joint
Employer Status'', with Representatives Virginia Foxx (R-NC),
Mike Johnson (R-LA), Jim Banks (R-IN), Aaron Bean (R-FL), Earl
L. ``Buddy'' Carter (R-GA), Tom Cole (R-OK), James Comer (R-
KY), Eric A. ``Rick'' Crawford (R-AR), Jeff Duncan (R-SC),
Scott Fitzgerald (R-WI), Bob Good (R-VA), Lance Gooden (R-TX),
Diana Harshbarger (R-TN), Clay Higgins (R-LA), Ashley Hinson
(R-IA), Erin Houchin (R-IN), Jake LaTurner (R-KS), Julia Letlow
(R-LA), Lisa C. McClain (R-MI), John R. Moolenaar (R-MI),
Alexander X. Mooney (R-WV), Greg Pence (R-IN), John W. Rose (R-
TN), Adrian Smith (R-NE), Michelle Steel (R-CA), Glenn Thompson
(R-PA), Tim Walberg (R-MI), Elise M. Stefanik (R-NY), and David
G. Valadao (R-CA). H.J. Res. 98 was a Congressional Review Act
resolution of disapproval to overturn the NLRB's 2023 joint
employer rule. On December 12, 2023, the Committee considered
H.J. Res. 98 in legislative session and reported it favorably
to the House of Representatives by a recorded vote of 25-20.
Second Session--Legislative Action
On January 12, 2024, H.J. Res. 98 passed the House of
Representatives by a recorded vote of 206-177.
119TH CONGRESS
First Session--Hearing
On June 11, 2025, the HELP Subcommittee held a hearing
titled ``Restoring Balance: Ensuring Fairness and Transparency
at the NLRB,'' which examined the NLRB's joint-employer
standard, among other topics. Witnesses were Mr. G. Roger King,
Senior Labor and Employment Counsel, HR Policy Association,
Washington, DC; Mr. F. Vincent Vernuccio, President, Institute
for the American Worker, Hamilton, VA; Mr. Aaron Solem, Staff
Attorney, National Right to Work Legal Defense Foundation,
Springfield, VA; and Ms. Jennifer Abruzzo, Senior Advisor to
the President, Communication Workers of America, Washington DC.
First Session--Legislative Action
On July 14, 2025, Representative James Comer (R-KY)
introduced H.R. 4366, the Save Local Business Act, which sets
the standard by which a worker may be considered employed by a
joint employer under the NLRA and the FLSA. On July 23, 2025,
the Committee considered H.R. 4366 in legislative session and
reported it favorably, as amended, to the House of
Representatives by a vote of 20-16. The Committee considered
the following amendments to H.R. 4366:
1. Representative Robert F. Onder (R-MO) offered an
amendment in the nature of a substitute, making technical
changes to the bill. The Committee adopted the amendment by
voice vote.
2. Representative Alma S. Adams (D-NC) offered an amendment
to prevent the provision in the bill amending the definition of
employer under the FLSA from coming into effect in cases of
unlawful child labor under the FLSA. The amendment failed by a
recorded vote of 16-20.
Committee Views
INTRODUCTION
The joint-employer standard can impact any business that
contracts with another business, such as franchisors and
franchisees, contractors and subcontractors, suppliers, and
other corners of the economy. The test for determining when two
or more entities are to be considered joint employers has
fluctuated with presidential administrations for the last
decade, sowing chaos for job creators. During the first Trump
administration, the NLRB and the Department of Labor (DOL)
reversed disastrous Obama-era policies and promulgated
commonsense rules that limited liability for job creators.\1\
However, the Biden NLRB replaced the first Trump administration
NLRB's joint-employer final rule, destabilizing this area of
the law again. Because the NLRA currently only defines
``employer'' and does not include a definition for ``joint
employer,'' each iteration of the Board can adopt its own
standard, subjecting America's workforce to the political winds
of the moment. H.R. 4366, the Save Local Business Act, would
calm this area of the law and allow small business owners to
start and grow their businesses in peace.
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\1\Joint Employer Status Under the National Labor Relations Act, 85
Fed. Reg. 11,184 (Feb. 26, 2020); Joint Employer Status under the Fair
Labor Standards Act, 86 Fed. Reg. 40,939 (Jan. 16, 2020).
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THE NLRB JOINT EMPLOYER STANDARD
The NLRA's purpose is to protect the rights of most
private-sector employees to organize and collectively bargain
with their employers, or to refrain from those activities; to
minimize industrial strife; and to curtail certain behaviors of
labor and management deemed harmful to the general welfare of
workers, businesses, and the economy overall.\2\ The NLRB is an
independent federal agency established by the NLRA to fulfill
two principal functions: (1) to determine whether employees
wish to be represented by a union and (2) to prevent and remedy
employer and union unlawful acts, called unfair labor practices
(ULPs).
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\2\See 29 U.S.C. Sec. 151.
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From 1984 to 2015, the NLRB determined whether two separate
entities should be considered joint employers by analyzing
whether the entities shared control over or co-determined the
essential terms and conditions of employment.\3\ Essential
terms and conditions of employment could include hiring,
firing, discipline, supervision, and direction of employees.
Prior to 2015, each entity's control over these employment
matters needed to be ``actual, direct, and immediate'' for the
Board to find two or more entities to be joint employers.\4\
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\3\TLI, Inc., 271 NLRB 798, 798-99 (1984), overruled by Browning-
Ferris Indus. (BFI), 362 NLRB No. 186 (2015).
\4\See Airborne Express, 338 NLRB 597, 597 n.1 (2002) (``[The]
essential element in [joint employer] analysis is whether a putative
joint employer's control over employment matters is direct and
immediate.''); AM Prop. Holding Corp., 350 NLRB 998, 1000 (2007) (``In
assessing whether a joint employer relationship exists, the Board . . .
looks to the actual practice of the parties.'').
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In 2015, the NLRB issued its decision in Browning-Ferris
Industries, radically revising the joint employer standard.\5\
Under this standard, companies sharing indirect or potential
control over another entity's workforce may be considered joint
employers.\6\ Practically, an entity could be held liable for
the decisions of another entity--whether or not the first
entity was even aware of the second entity's decisions and
activities.
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\5\BFI, 362 NLRB No. 186 (2015).
\6\Id.
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During the first Trump administration, the NLRB promulgated
a rule restoring the historic, direct-control, joint-employer
standard and effectively overruled Browning-Ferris.\7\ In 2023,
however, the Biden NLRB issued a final rule of its own,
establishing its standard for determining joint-employer status
under the NLRA,\8\ largely reviving the Obama-era Browning-
Ferris standard.\9\ The 2023 Biden rule rescinded and replaced
the Trump NLRB's joint-employer rule which had refocused the
Board's analysis on the company's ``direct and immediate
control'' of employees.\10\
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\7\Joint Employer Status Under the National Labor Relations Act, 85
Fed. Reg. 11,184 (Feb. 26, 2020).
\8\Standard for Determining Joint-Employer Status, 88 Fed. Reg.
53,946 (Oct. 27, 2023).
\9\BFI, 362 NLRB No. 186 (2015).
\10\Joint Employer Status Under the National Labor Relations Act,
85 Fed. Reg. 11,184 (Feb. 26, 2020).
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Under the 2023 Biden NLRB rule, a joint-employer
relationship is established when employers codetermine, whether
directly or indirectly, employees' essential terms and
conditions of employment.\11\ In other words, under the Biden
NLRB rule, an entity can be considered a joint employer even if
it does not actually control the employees involved. Any entity
that exercises or even reserves the right to exercise control,
even indirect control, over at least one essential term of
employment is a joint employer under this rule. As a practical
matter, the 2023 Biden NLRB rule treats most entities that
contract for labor as joint employers because nearly every
contract for third-party labor includes terms that bear on at
least one of the specified essential terms and conditions of
employment. This sweeping joint-employer rule was vacated by a
Texas federal district court in March 2024, causing even more
uncertainty for businesses.\12\ In July 2024, the NLRB withdrew
its appeal of the district court's decision vacating the Biden
NLRB rule.\13\
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\11\Standard for Determining Joint Employer Status, 88 Fed. Reg.
73,946 (Oct. 27, 2023).
\12\Chamber of Com. of U.S. v. NLRB, 723 F. Supp. 3d 498 (E.D. Tex.
2024).
\13\https://news.bloomberglaw.com/daily-labor-report/labor-board-
abandons-bid-to-revive-joint-employer-regulation.
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THE JOINT EMPLOYER STANDARD UNDER THE FLSA
The FLSA is the primary federal statute establishing
standards for minimum wage, overtime pay, child labor,
recordkeeping, and other wage-and-hour standards covering over
140 million individuals, including most private and public-
sector employees.\14\ Congress delegates authority to DOL to
interpret the FLSA via regulations, but state wage-and-hour
laws are not preempted by the FLSA provided the states' laws
are more protective of employees.\15\ The FLSA also provides
for enforcement actions by DOL and private litigation brought
by employees against employers. The resulting decisions of
federal courts also shape the law.
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\14\29 U.S.C. Sec. Sec. 201-262.
\15\Id. Sec. 218.
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The threat of sweeping joint employer standards under the
FLSA was addressed by Mr. Zachary Fasman, Partner at Proskauer
Rose, LLP, when he testified before the HELP Subcommittee in
2017. Describing the legal landscape, Mr. Fasman noted:
While there have been numerous decisions on joint
employer status under the FLSA, there is no commonly
accepted test for joint employer liability under the
statute. Some courts rely upon a four factor ``economic
reality'' test; others add as many as six or eight
factors to that test, others consider whether the
putative joint employer can discipline or discharge an
employee, while new and novel--and different--tests
continue to arise in federal courts across the country.
Employers with multi-state operations have no idea what
standards will apply to their operations, or when they
may be held responsible--after the fact, if the NLRB's
Browning-Ferris standards are applied--for another
employer's wage and payroll practices.\16\
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\16\The Save Local Business Act: Hearing on H.R. 3441 Before the
Subcomm. on Health, Emp., Lab., & Pensions and the Subcomm. on
Workforce Protections of the H. Comm. on Educ. & the Workforce, 115th
Cong. 54 (2017) (statement of Zachary D. Fasman, Partner, Proskauer
Rose, LLP).
Because the FLSA, like the NLRA, currently only defines the
term ``employer'' and not ``joint employer,'' federal courts
have developed various tests for determining whether two
entities have a joint-employer relationship under the FLSA.
H.R. 4366 will bring uniformity to this body of law and give
business owners the confidence they need to start and expand
their enterprises across state lines without fear.
CONSEQUENCES OF BROAD, SHIFTING JOINT-EMPLOYER STANDARDS
Mr. Vincent Vernuccio, President of the Institute for the
American Worker, testified before the HELP Subcommittee on June
11, 2025, about the pernicious effects of the shifting legal
standards for determining joint-employer status:
The constant legal whiplash has created significant
instability for employers, especially small businesses,
and workers. Businesses now face uncertainty over when
they might be held liable for workers they do not hire,
supervise, or compensate--making it harder to
confidently enter partnerships, grow, or invest in
workforce development. Industries that rely on
franchising, subcontracting, or staffing are
particularly vulnerable.\17\
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\17\Restoring Balance: Ensuring Fairness and Transparency at the
NLRB: Hearing Before the Subcomm. on Health, Emp., Lab. & Pensions of
the H. Comm. on Educ. & Workforce, 119th Cong. (2025) (written
statement of F. Vincent Vernuccio, President, Inst. for the Am. Worker,
at 11).
Mr. Kevin Cole, CEO of Ennis Electric Company, Inc., testifying
on behalf of the Independent Electrical Contractors, told the
HELP Subcommittee about the far-reaching effects of a broad
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joint-employer rule on electrical contracting:
Moving forward, almost any contractual relationship
we enter into may trigger a finding of a joint employer
status that would make us liable for the employment and
labor actions of our subcontractors, vendors,
suppliers, and staffing firms. In addition, as we
understand it, the new standard would also expose my
company to another company's collective bargaining
obligations and economic protest activity, to include
strikes, boycotts, and picketing.\18\
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\18\H.R. 3459, ``Protecting Local Business Opportunity Act'':
Hearing Before the Subcomm. on Health, Emp., Lab. & Pensions of the H.
Comm. on Educ. & the Workforce, 114th Cong. 52 (2015) (statement of
Kevin R. Cole, Chief Exec. Officer, Ennis Electric Co.).
Nowhere do the broad and shifting joint employer standards
do more harm than in the context of the franchise industry. In
his testimony to the HELP Subcommittee on December 13, 2023,
Mr. Matthew Haller, President of the International Franchise
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Association (IFA), described the franchise model:
A franchisee is first a local business, distinguished
from other local businesses because it licenses the
branding and operational processes of a franchisor, or
brand company, while operating independently in a set
location. The franchise model provides a smoother path
to entrepreneurship than developing an independent
business, with franchisors sharing confidential and
proprietary information regarding site selection and
development strategies, training programs and branding
campaigns to facilitate faster speed to market for
franchisees in addition to providing continuing
operational support throughout the long-term franchise
relationship. The local owner, or franchisee, is
responsible for hiring staff, organizing schedules,
managing payroll and all daily operational tasks--and
critically, creating a distinct company culture and
direct relationship with employees--as well as local
sales and marketing. The value of franchising lies in a
strategic balance in the relationship between a
franchisor and franchisee: the independence of a
franchisee to manage its day-to-day operations and
connections with its employees, consumers, and the
local community. The franchise business model gives
aspiring small business owners head starts toward
becoming their own boss, with a proven business model
that can set up new business owners for success and
easier access to lines of credit than a traditional
business.\19\
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\19\Protecting Workers and Small Businesses from Biden's Attack on
Worker Free Choice and Economic Growth: Hearing Before the Subcomm. on
Health, Emp., Lab. & Pensions of the H. Comm. on Educ. & the Workforce,
118th Cong. 49 (2023) (statement of Matthew Haller, President & CEO,
Int'l Franchise Ass'n).
The joint-employer standard under Browning-Ferris caused
significant operational and economic harm to both franchisors
and franchisees. While the Browning-Ferris standard was in
effect, an economic analysis found the decision cost the
franchising sector $33.3 billion annually, resulting in as many
as 376,000 lost job opportunities.\20\
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\20\Ronald Bird, Statement Regarding the Economic Impact of the
Prospective NLRB Public Policy Decision Regarding the Definition of
Joint Employer 2 (2019), https://www.franchise.org/sites/default/files/
2019-05/JE%20Econ%20Impact%200128.pdf.
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When the Biden NLRB in 2023 reversed the Trump joint-
employer rule and brought back the Browning-Ferris standard,
job creators felt the negative effects. Mr. Haller testified:
Without question, the biggest threat to the strength
of franchise relationships, sustainability of the
franchise model and future of the entire franchising
community--including franchisees, franchisors,
suppliers to franchise systems, and the hundreds of
thousands of workers they employ and consumers they
serve--is the NLRB's unnecessary joint employer rule,
which was finalized in October 2023 and is scheduled to
take effect in February 2024.\21\
---------------------------------------------------------------------------
\21\Haller statement, supra note 18, at 53.
Mr. Haller went on to testify about the practical implications
of a broad joint-employer standard for job creators and
---------------------------------------------------------------------------
business owners:
A ``joint employer'' finding under the NLRA carries
with it dramatic and significant consequences. A joint
employer may be held liable for unfair labor practices
(ULPs) committed by an unrelated company, even where
the first had no control over the actions of the second
leading to the ULP. A joint employer is subject to
secondary activity, such as boycotting and picketing,
which would otherwise be unlawful. Finally, and perhaps
most significant, a joint employer (or dozens of joint
employers) may be required to bargain with a union over
any term or condition of employment over which it
exercises (or reserves the right to exercise) even a
modicum of control--a set of facts certain to frustrate
any effort to reach agreement at the bargaining
table.\22\
---------------------------------------------------------------------------
\22\Id.
Under the Biden NLRB joint-employer standard, franchisors
have several choices with respect to how they build and
maintain relationships with their franchisees. First, they can
become more involved in the day-to-day operations of their
franchisees, treating them more like employees, in order to
reduce the likelihood that they will be liable for the actions
of their franchisees. This will destroy the freedom and
opportunity of franchisees to run their small businesses,
ultimately destroying the character of the franchise model.
Second, franchisors may have to increase the fees they charge
franchisees in order to offset the potential costs of increased
liability for franchisees' actions. This will also raise the
barrier to entry for Americans who want to run their own
businesses because it requires more resources to start the
business. Finally, franchisors could choose to withdraw much of
the support they offer to franchisees in order to reduce the
likelihood they will be found to be a joint employer of the
franchisees' employees.\23\ This result would also be
devastating to the franchise model because it is the support
from a franchisor that reduces the risk a small business owner
faces when starting his or her own business.
---------------------------------------------------------------------------
\23\Id. at 55.
---------------------------------------------------------------------------
Without a consistent, predictable, and clear joint-employer
standard, small business suffer and many Americans who might
otherwise start a business or expand their existing businesses
are not able to do so because of the mounting costs brought on
by the legal uncertainty. Fewer businesses results in fewer
jobs, but the ripple effect of a confusing legal landscape goes
further. Only Congress can bring the kind of stability that
will foster a flourishing American economy and protect it from
the changing views of the NLRB and the DOL.
CONCLUSION
H.R. 4366 restores the joint-employer standard that workers
and employers relied on for decades before the Obama and Biden
NLRBs put union interests above those of workers and small
business owners. H.R. 4366 codifies what had been the rule for
most of the last 40 years: two or more entities must have
actual, direct, and immediate control over workers to be
considered their employers. Without H.R. 4366, the patchwork of
joint-employer standards under the FLSA, created by various
courts across the country, will continue to grow and exacerbate
the regulatory confusion for job creators trying to run
businesses in multiple states. Syncing the joint-employer
definitions in the FLSA and the NLRA brings necessary clarity
and stability to the law.
H.R. 4366 is an appropriate response to the repeated and
misguided efforts of an NLRB captured by union interests. The
bill maintains existing worker protections while correcting a
confusing and partisan joint-employer scheme that makes it
harder for Americans to start and grow their businesses. The
bill rightly makes the actual employer legally responsible for
protecting workers and complying with the law.
H.R. 4366 Section-by-Section Summary
Section 1. Provides that the short title is the ``Save
Local Business Act.''
Section 2. Amends the NLRA to allow two or more employers
to be considered joint employers if each employer directly,
actually, and immediately exercises significant control over
the essential terms and conditions of employment of the
employees of the other employer. Essential terms and conditions
of employment include hiring employees; discharging them;
determining their rate of pay and benefits; supervising them on
a day-to-day basis; assigning them a work schedule, position,
or task; or discipling them.
Section 3. Amends the FLSA to allow two or more employers
to be considered joint employers for purposes of the FLSA under
the same criteria as set forth in section 2 of H.R. 4366
amending the NLRA.
Explanation of Amendments
The amendments, including the amendment in the nature of a
substitute, are explained in the body of this report.
Application of Law to the Legislative Branch
Section 102(b)(3) of Public Law 104-1 requires a
description of the application of this bill to the legislative
branch. H.R. 4366 clarifies the standard for determining
whether an entity is a joint employer, including for eligible
employees of the legislative branch.
Unfunded Mandate Statement
Pursuant to Section 423 of the Congressional Budget and
Impoundment Control Act of 1974, Pub. L. No. 93-344 (as amended
by Section 101(a)(2) of the Unfunded Mandates Reform Act of
1995, Pub. L. No. 104-4), the Committee traditionally adopts as
its own the cost estimate prepared by the Director of the
Congressional Budget Office (CBO) pursuant to section 402 of
the Congressional Budget and Impoundment Control Act of 1974.
The Committee reports that because this cost estimate was not
timely submitted to the Committee before the filing of this
report, the Committee is not in a position to make a cost
estimate for H.R. 4366.
Earmark Statement
H.R. 4366 does not contain any congressional earmarks,
limited tax benefits, or limited tariff benefits as defined in
clause 9 of House rule XXI.
Roll Call Votes
Clause 3(b) of rule XIII of the Rules of the House of
Representatives requires the Committee Report to include for
each record vote on a motion to report the measure or matter
and on any amendments offered to the measure or matter the
total number of votes for and against and the names of the
Members voting for and against.
Statement of General Performance Goals and Objectives
In accordance with clause (3)(c) of House of
Representatives rule XIII, the goal of H.R. 4366, the Save
Local Business Act, is to amend the National Labor Relations
Act (NLRA) and the Fair Labor Standards Act (FLSA) to provide a
commonsense standard for determining whether a joint employment
relationship exists in order to provide clarity and consistency
in this area of the law and to safeguard the independence of
businesses, especially small businesses like franchisees and
subcontractors.
Duplication of Federal Programs
No provision of H.R. 4366 establishes or reauthorizes a
program of the Federal Government known to be duplicative of
another Federal program, a program that was included in any
report from the Government Accountability Office to Congress
pursuant to section 21 of Public Law 111-139, or a program
related to a program identified in the most recent Catalog of
Federal Domestic Assistance.
Statement of Oversight Findings and Recommendations
of the Committee
In compliance with clause 3(c)(1) of rule XIII and clause
2(b)(1) of rule X of the Rules of the House of Representatives,
the Committee's oversight findings and recommendations are
reflected in the body of this report.
Required Committee Hearing
In compliance with clause 3(c)(6) of rule XIII of the Rules
of the House of Representatives the following hearing held
during the 119th Congress was used to develop or consider H.R.
4366: On June 11, 2025, the Subcommittee on Health, Employment,
Labor, and Pensions held a hearing on ``Restoring Balance:
Ensuring Fairness and Transparency at the NLRB.''
New Budget Authority and CBO Cost Estimate
With respect to the requirements of clause 3(c)(2) of rule
XIII of the Rules of the House of Representatives and section
308(a) of the Congressional Budget Act of 1974 and with respect
to requirements of clause 3(c)(3) of rule XIII of the Rules of
the House of Representatives and section 402 of the
Congressional Budget Act of 1974, a cost estimate was not made
available to the Committee in time for the filing of this
report. The Chairman of the Committee shall cause such estimate
to be printed in the Congressional Record upon its receipt by
the Committee.
Committee Cost Estimate
Clause 3(d)(1) of rule XIII of the Rules of the House of
Representatives requires an estimate and a comparison of the
costs that would be incurred in carrying out H.R. 4366.
However, clause 3(d)(2)(B) of that Rule provides that this
requirement does not apply when, as with the present report,
the Committee has requested a cost estimate for the bill from
the Director of the Congressional Budget Office.
Changes in Existing Law Made by the Bill, as Reported
In compliance with clause 3(e) of rule XIII of the Rules of
the House of Representatives, changes in existing law made by
the bill, as reported, are shown as follows (existing law
proposed to be omitted is enclosed in black brackets, new
matter is printed in italics, and existing law in which no
change is proposed is shown in roman):
NATIONAL LABOR RELATIONS ACT
* * * * * * *
definitions
Sec. 2. When used in this Act--
(1) The term ``person'' includes one or more individuals,
labor organizations, partnerships, associations, corporations,
legal representatives, trustees, trustees in cases under title
11 of the United States Code, or receivers.
(2) [The term ``employer''] (A) The term ``employer''
includes any person acting as an agent of an employer, directly
or indirectly, but shall not include the United States or any
wholly owned Government corporation, or any Federal Reserve
Bank, or any State or political subdivision thereof, or any
person subject to the Railway Labor Act, as amended from time
to time, or any labor organization (other than when acting as
an employer), or anyone acting in the capacity of officer or
agent of such labor organization.
(B) An employer may be considered a joint employer of the
employees of another employer only if each employer directly,
actually, and immediately, exercises significant control over
the essential terms and conditions of employment of the
employees of the other employer, such as hiring such employees,
discharging such employees, determining the rate of pay and
benefits of such employees, supervising such employees on a
day-to-day basis, assigning such employees a work schedule,
position, or task, or disciplining such employees.
(3) The term ``employee'' shall include any employee, and
shall not be limited to the employees of a particular employer,
unless the Act explicitly states otherwise, and shall include
any individual whose work has ceased as a consequence of, or in
connection with, any current labor dispute or because of any
unfair labor practice, and who has not obtained any other
regular and substantially equivalent employment, but shall not
include any individual employed as an agricultural laborer, or
in the domestic service of any family or person at his home, or
any individual employed by his parent or spouse, or any
individual having the status of an independent contractor, or
any individual employed as a supervisor, or any individual
employed by an employer subject to the Railway Labor Act, as
amended from time to time, or by any other person who is not an
employer as herein defined.
(4) The term ``representatives'' includes any individual or
labor organization.
(5) The term ``labor organization'' means any organization of
any kind, or any agency or employee representation committee or
plan, in which employees participate and which exists for the
purpose, in whole or in part, of dealing with employers
concerning grievances, labor disputes, wages, rates of pay,
hours of employment, or conditions of work.
(6) The term ``commerce'' means trade, traffic, commerce,
transportation, or communication among the several States, or
between the District of Columbia or any Territory of the United
States and any State or other Territory, or between any foreign
country and any State, Territory, or the District of Columbia,
or within the District of Columbia or any Territory, or between
points in the same State but through any other State or any
Territory or the District of Columbia or any foreign country.
(7) The term ``affecting commerce'' means in commerce, or
burdening or obstructing commerce or the free flow of commerce,
or having led or tending to lead to a labor dispute burdening
or obstructing commerce or the free flow of commerce.
(8) The term ``unfair labor practice'' means any unfair labor
practice listed in section 8.
(9) The term ``labor dispute'' includes any controversy
concerning terms, tenure or conditions of employment, or
concerning the association or representation of persons in
negotiating, fixing, maintaining, changing, or seeking to
arrange terms or conditions of employment, regardless of
whether the disputants stand in the proximate relation of
employer and employee.
(10) The term ``National Labor Relations Board'' means the
National Labor Relations Board provided for in section 3 of
this Act.
(11) The term ``supervisor'' means any individual having
authority, in the interest of the employer, to hire, transfer,
suspend, lay off, recall, promote, discharge, assign, reward,
or discipline other employees, or responsibly to direct them,
or to adjust their grievances, or effectively to recommend such
action, if in connection with the foregoing the exercise of
such authority is not of a merely routine or clerical nature,
but requires the use of independent judgment.
(12) The term ``professional employee'' means--
(a) any employee engaged in work (i) predominantly
intellectual and varied in character as opposed to
routine mental, manual, mechanical, or physical work;
(ii) involving the consistent exercise of discretion
and judgment in its performance; (iii) of such a
character that the output produced or the result
accomplished cannot be standardized in relation to a
given period of time; (iv) requiring knowledge of an
advanced type in a field of science or learning
customarily acquired by a prolonged course of
specialized intellectual instruction and study in an
institution of higher learning or a hospital, as
distinguished from a general academic education or from
an apprenticeship or from training in the performance
of routine mental, manual, or physical processes; or
(b) any employee, who (i) has completed the courses
of specialized intellectual instruction and study
described in clause (iv) of paragraph (a), and (ii) is
performing related work under the supervision of a
professional person to qualify himself to become a
professional employee as defined in paragraph (a).
(13) In determining whether any person is acting as an
``agent'' of another person so as to make such other person
responsible for his acts, the question of whether the specific
acts performed were actually authorized or subsequently
ratified shall not be controlling.
(14) The term ``health care institution'' shall include any
hospital, convalescent hospital, health maintenance
organization, health clinic, nursing home, extended care
facility, or other institution devoted to the care of sick,
infirm, or aged person.
* * * * * * *
----------
FAIR LABOR STANDARDS ACT OF 1938
* * * * * * *
definitions
Sec. 3. As used in this Act--
(a) ``Person'' means an individual, partnership, association,
corporation, business trust, legal representative, or any
organized group of persons.
(b) ``Commerce'' means trade, commerce, transportation,
transmission, or communication among the several States or
between any State and any place outside thereof.
(c) ``State'' means any State of the United States or the
District of Columbia or any Territory or possession of the
United States.
(d) [``Employer'' includes] (1) ``Employer'' includes any
person acting directly or indirectly in the interest of an
employer in relation to an employee and includes a public
agency, but does not include any labor organization (other than
when acting as an employer) or anyone acting in the capacity of
officer or agent of such labor organization.
(2) An employer may be considered a joint employer of the
employees of another employer for purposes of this Act only if
each employer meets the criteria set forth in section 2(2)(B)
of the National Labor Relations Act (29 U.S.C. 152(2)(B))
except that, for purposes of determining joint-employer status
under this Act, the terms ``employee'' and ``employer''
referenced in such section shall have the meanings given such
terms in this section.
(e)(1) Except as provided in paragraphs (2), (3), and (4),
the term ``employee'' means any individual employed by an
employer.
(2) In the case of an individual employed by a public agency,
such term means--
(A) any individual employed by the Government of the
United States--
(i) as a civilian in the military departments
(as defined in section 102 of title 5, United
States Code),
(ii) in any executive agency (as defined in
section 105 of such title),
(iii) in any unit of the judicial branch of
the Government which has positions in the
competitive service,
(iv) in a nonappropriated fund
instrumentality under the jurisdiction of the
Armed Forces,
(v) in the Library of Congress, or
(vi) the Government Printing Office;
(B) any individual employed by the United States
Postal Service or the Postal Rate Commission; and
(C) any individual employed by a State, political
subdivision of a State, or an interstate governmental
agency, other than such an individual--
(i) who is not subject to the civil service
laws of the State, political subdivision, or
agency which employs him; and
(ii) who--
(I) holds a public elective office of
that State, political subdivision, or
agency,
(II) is selected by the holder of
such an office to be a member of his
personal staff,
(III) is appointed by such an
officeholder to serve on a policymaking
level,
(IV) is an immediate adviser to such
an officeholder with respect to the
constitutional or legal powers of his
office, or
(V) is an employee in the legislative
branch or legislative body of that
State, political subdivision, or agency
and is not employed by the legislative
library of such State, political
subdivision, or agency.
(3) For purposes of subsection (u), such term does not
include any individual employed by an employer engaged in
agriculture if such individual is the parent, spouse, child, or
other member of the employer's immediate family.
(4)(A) The term ``employee'' does not include any individual
who volunteers to perform services for a public agency which is
a State, a political subdivision of a State, or an interstate
governmental agency, if--
(i) the individual receives no compensation or is
paid expenses, reasonable benefits, or a nominal fee to
perform the services for which the individual
volunteered; and
(ii) such services are not the same type of services
which the individual is employed to perform for such
public agency.
(B) An employee of a public agency which is a State,
political subdivision of a State, or an interstate governmental
agency may volunteer to perform services for any other State,
political subdivision, or interstate governmental agency,
including a State, political subdivision or agency with which
the employing State, political subdivision, or agency has a
mutual aid agreement.
(5) The term ``employee'' does not include individuals who
volunteer their services solely for humanitarian purposes to
private non-profit food banks and who receive from the food
banks groceries.
(f) ``Agriculture'' includes farming in all its branches and
among other things includes the cultivation and tillage of the
soil, dairying, the production, cultivation, growing, and
harvesting of any agricultural or horticultural commodities
(including commodities defined as agricultural commodities in
section 15(g) of the Agricultural Marketing Act, as amended),
the raising of livestock, bees, fur-bearing animals, or
poultry, and any practices (including any forestry or lumbering
operations) performed by a farmer or on a farm as an incident
to or in conjunction with such farming operations, including
preparation for market, delivery to storage or to market or to
carriers for transportation to market.
(g) ``Employ'' includes to suffer or permit to work.
(h) ``Industry'' means a trade, business, industry, or other
activity, or branch or group thereof, in which individuals are
gainfully employed.
(i) ``Goods'' means goods (including ships and marine
equipment), wares, products, commodities, merchandise, or
articles or subjects of commerce of any character, or any part
or ingredient thereof, but does not include goods after their
delivery into the actual physical possession of the ultimate
consumer thereof other than a producer, manufacturer, or
processor thereof.
(j) ``Producer'' means produced, manufactured, mined,
handled, or in any manner worked on in any State; and for the
purposes of this Act an employee shall be deemed to have been
engaged in the production of goods if such employee was
employed in producing, manufacturing, mining, handling,
transporting, or in any other manner working on such goods, or
in any closely related process or occupation directly essential
to the production thereof, in any State.
(k) ``Sale'' or ``sell'' includes any sale, exchange,
contract to sell, consignment for sale, shipment for sale, or
other disposition.
(l) ``Oppressive child labor'' means a condition of
employment under which (1) any employee under the age of
sixteen years is employed by an employer (other than a parent
or a person standing in place of a parent employing his own
child or a child in his custody under the age of sixteen years
in an occupation other than manufacturing or mining or an
occupation found by the Secretary of Labor to be particularly
hazardous for the employment of children between the ages of
sixteen and eighteen years or detrimental to their health or
well-being) in any occupation, or (2) any employee between the
ages of sixteen and eighteen years is employed by an employer
in any occupation which the Secretary of Labor shall find and
by order declare to be particularly hazardous for the
employment of children between such ages or detrimental to
their health or well-being; but oppressive child labor shall
not be deemed to exist by virture of the employment in any
occupation of any person with respect to whom the employer
shall have on file an unexpired certificate issued and held
pursuant to regulations of the Secretary of Labor certifying
that such person is above the oppressive child labor age. The
Secretary of Labor shall provide by regulation or by order that
the employment of employees between the ages of fourteen and
sixteen years in occupations other than manufacturing and
mining shall not be deemed to constitute oppressive child labor
if and to the extent that the Secretary of Labor determines
that such employment is confined to periods which will not
interfere with their schooling and to conditions which will not
interfere with their health and well-being.
(m)(1) ``Wage'' paid to any employee includes the reasonable
cost, as determined by the Secretary of Labor, to the employer
of furnishing such employee with board, lodging, or other
facilities, if such board, lodging, or other facilities are
customarily furnished by such employer to his employees:
Provided, That the cost of board, lodging, or other facilities
shall not be included as a part of the wage paid to any
employee to the extent it is excluded therefrom under the terms
of a bona fide collective-bargaining agreement applicable to
the particular employee: Provided further, That the Secretary
is authorized to determine the fair value of such board,
lodging, or other facilities for defined classes of employees
and in defined areas, based on average cost to the employer or
to groups of employers similarly situated, or average value to
groups of employees, or other appropriate measures of fair
value. Such evaluations, where applicable and pertinent, shall
be used in lieu of actual measure of cost in determining the
wage paid to any employee.
(2)(A) In determining the wage an employer is required to pay
a tipped employee, the amount paid such employee by the
employee's employer shall be an amount equal to--
(i) the cash wage paid such employee which for
purposes of such determination shall be not less than
the cash wage required to be paid such an employee on
the date of the enactment of this paragraph; and
(ii) an additional amount on account of the tips
received by such employee which amount is equal to the
difference between the wage specified in clause (i) and
the wage in effect under section 6(a)(1).
The additional amount on account of tips may not exceed the
value of the tips actually received by an employee. The
preceding 2 sentences shall not apply with respect to any
tipped employee unless such employee has been informed by the
employer of the provisions of this subsection, and all tips
received by such employee have been retained by the employee,
except that this subsection shall not be construed to prohibit
the pooling of tips among employees who customarily and
regularly receive tips.
(B) An employer may not keep tips received by its employees
for any purposes, including allowing managers or supervisors to
keep any portion of employees' tips, regardless of whether or
not the employer takes a tip credit.
(n) ``Resale'' shall not include the sale of goods to be used
in residential or farm building construction, repair, or
maintenance: Provided, That the sale is recognized as a bona
fide retail sale in the industry.
(o) Hours Worked.--In determining for the purposes of
sections 6 and 7 the hours for which an employee is employed,
there shall be excluded any time spent in changing clothes or
washing at the beginning or end of each workday which was
excluded from measured working time during the week involved by
the express terms of or by custom or practice under a bona fide
collective-bargaining agreement applicable to the particular
employee.
(p) ``American vessel'' includes any vessel which is
documented or numbered under the laws of the United States.
(q) ``Secretary'' means the Secretary of Labor.
(r)(1) ``Enterprise'' means the related activities performed
(either through unified operation or common control) by any
person or persons for a common business purpose, and includes
all such activities whether performed in one or more
establishments or by one or more corporate or other
organizational units including departments of an establishment
operated through leasing arrangements, but shall not include
the related activities performed for such enterprise by an
independent contractor. Within the meaning of this subsection,
a retail or service establishment which is under independent
ownership shall not be deemed to be so operated or controlled
as to be other than a separate and distinct enterprise by
reason of any arrangement, which includes, but is not
necessarily limited to, an agreement, (A) that it will sell, or
sell only, certain goods specified by a particular
manufacturer, distributor, or advertiser, or (B) that it will
join with other such establishments in the same industry for
the purpose of collective purchasing, or (C) that it will have
the exclusive rights to sell the goods or use the brand name of
a manufacturer, distributor, or advertiser within a specified
area, or by reason of the fact that it occupies premises leased
to it by a person who also leases premises to other retail or
service establishments.
(2) For purposes of paragraph (1), the activities performed
by any person or persons--
(A) in connection with the operation of a hospital,
an institution primarily engaged in the care of the
sick, the aged, the mentally ill or defective who
reside on the premises of such institution, a school
for mentally or physicially handicapped or gifted
children, a preschool, elementary or secondary school,
or an institution of higher education (regardless of
whether or not such hospital, institution, or school is
operated for profit or not for profit), or
(B) in connection with the operation of a street,
suburban or interurban electric railway, or local
trolley or motorbus carrier, if the rates and services
of such railway or carrier are subject to regulation by
a State or local agency (regardless of whether or not
such railway or carrier is public or private or
operated for profit or not for profit), or
(C) in connection with the activities of a public
agency.
shall be deemed to be activities performed for a business
purpose.
(s)(1) ``Enterprise engaged in commerce or in the production
of goods for commerce'' means an enterprise that--
(A)(i) has employees engaged in commerce or in the
production of goods for commerce, or that has employees
handling, selling, or otherwise working on goods or
materials that have been moved in or produced for
commerce by any person; and
(ii) is an enterprise whose annual gross volume of
sales made or business done is not less than $500,000
(exclusive of excise taxes at the retail level that are
separately stated);
(B) is engaged in the operation of a hospital, an
institution primarily engaged in the care of the sick,
the aged, or the mentally ill or defective who reside
on the premises of such institution, a school for
mentally or physically handicapped or gifted children,
a preschool, elementary or secondary school, or an
institution of higher education (regardless of whether
or not such hospital, institution, or school is public
or private or operated for profit or not for profit);
or
(C) is an activity of a public agency.
(2) Any establishment that has as its only regular employees
the owner thereof or the parent, spouse, child, or other member
of the immediate family of such owner shall not be considered
to be an enterprise engaged in commerce or in the production of
goods for commerce or a part of such an enterprise. The sales
of such an establishment shall not be included for the purpose
of determining the annual gross volume of sales of any
enterprise for the purpose of this subsection.
(t) ``Tipped employee'' means any employee engaged in an
occupation in which he customarily and regularly receives more
than $30 a month in tips.
(u) ``Man-day'' means any day during which an employee
performs any agricultural labor for not less than one hour.
(v) ``Elementary school'' means a day or residential school
which provides elementary education, as determined under State
law.
(w) ``Secondary school'' means a day or residential school
which provides secondary education, as determined under State
law.
(x) ``Public agency'' means the Government of the United
States; the government of a State or political subdivision
thereof; any agency of the United States (including the United
States Postal Service and Postal Rate Commission), a State, or
a political subdivision of a State; or any interstate
governmental agency.
(y) ``Employee in fire protection activities'' means an
employee, including a firefighter, paramedic, emergency medical
technician, rescue worker, ambulance personnel, or hazardous
materials worker, who--
(1) is trained in fire suppression, has the legal
authority and responsibility to engage in fire
suppression, and is employed by a fire department of a
municipality, county, fire district, or State; and
(2) is engaged in the prevention, control, and
extinguishment of fires or response to emergency
situations where life, property, or the environment is
at risk.
* * * * * * *
MINORITY VIEWS
INTRODUCTION
H.R. 4366, the Save Local Business Act, would limit the
cases in which more than one person or business can be held
jointly accountable for violations of bedrock policies such as
the minimum wage, child labor rules, and labor law. The bill
would empower companies that effectively hire workers through
subcontractors or temporary employment agencies to escape
accountability for child labor and wage theft and would
restrict unionized workers' ability to collectively bargain
over the full range of the terms and conditions of employment
in their workplaces.
This bill is opposed by the AFL-CIO, National Employment
Law Project, National Partnership for Women and Families,
National Women's Law Center Action Fund, and Signatory Wall and
Ceiling Contractors Alliance.
UNDERLYING LAW
This bill would amend two core workplace laws: the Fair
Labor Standards Act of 1938 (FLSA)\1\ and the National Labor
Relations Act (NLRA).\2\
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\1\Pub. L. No. 75-718, 52 Stat. 1060 (1938).
\2\Pub. L. No. 74-198, 49 Stat. 449 (1935).
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Fair Labor Standards Act
FLSA is the federal workplace standards law governing the
minimum wage,\3\ overtime,\4\ oppressive child labor,\5\
discrimination in pay on the basis of sex,\6\ and the right of
nursing mothers to take paid breaks at work for the purpose of
expressing breast milk.\7\ It is enforced by the Wage and Hour
Division (WHD) of the Department of Labor (DOL), as well as by
workers themselves who bring cases in court.
---------------------------------------------------------------------------
\3\Id. Sec. 6.
\4\Id. Sec. 7.
\5\Id. Sec. 12.
\6\Id. Sec. 6(d).
\7\Id. Sec. 18D.
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In FLSA, the term ``employ'' includes ``to suffer or permit
to work.''\8\ When establishing this broad definition of
employment, Congress consciously sought to expand the
employment relationship to hold accountable employers who would
not otherwise be liable for violations under a common-law
control test.\9\ Courts test the applicability of the FLSA
definition using the ``economic realities'' test, which looks
underneath whatever terms the parties to a relationship use to
describe it and focuses instead on the reality of the
relationship, based on the totality of the circumstances, to
determine whether the putative employee is economically
dependent on the potential employer.\10\ Ultimately, the
application of the economic realities factors is guided by the
overarching principle that the FLSA should be ``construed
liberally to apply to the furthest reaches consistent with
congressional direction.''\11\ The FLSA definition of
employment is the ``broadest definition that has ever been
included in any one act.''\12\
---------------------------------------------------------------------------
\8\Id. Sec. 3(g).
\9\Bruce Goldstein et al., Enforcing Fair Labor Standards in the
Modern American Sweatshop: Rediscovering the Statutory Definition of
Employment, 46 UCLA L. Rev. 983, 991 (1999).
\10\Tony & Susan Alamo Found. v. Sec'y of Labor, 471 U.S. 290, 301
(1985) (reiterating that the test of employment under the FLSA is
economic reality); Goldberg v. Whitaker House Co-op, Inc., 366 U.S. 28,
33 (1961).
\11\Mitchell v. Lublin, McGaughy & Assocs., 358 U.S. 207 (1959).
\12\United States v. Rosenwasser, 323 U.S. 360, 363 (1945) (quoting
81 Cong. Rec. 7,657 (1938) (remarks of Sen. Hugo Black)). The FLSA's
definition of ``employ'' is a standard of ``striking breadth'' that
``stretches the meaning of `employee' to cover some parties who might
not qualify as such under a strict application of traditional agency
law principles.'' Nationwide Mut. Ins. Co. v. Darden, 503 U.S. 318, 323
(1992).
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National Labor Relations Act
The NLRA is the foundational federal law governing labor
relations. Administered by the National Labor Relations Board
(NLRB), the NLRA protects the rights of employees to organize
and collectively bargain with their employers for improved
working conditions and benefits, among other things.
Under the NLRA, the question of whether a worker is an
employee or an independent contractor is governed by a common
law test of control.\13\ Among the factors courts and the NLRB
apply when examining whether workers are employees within the
meaning of the NLRA are ``the extent of control the employer
has over the work; . . . whether the worker is engaged in a
distinct occupation or business . . . ; whether the kind of
occupation is usually done under the direction of the employer
or by a specialist without supervision; [and] whether the
employer is or is not in business.''\14\
---------------------------------------------------------------------------
\13\See FedEx Home Delivery v. NLRB, 849 F.3d 1123, 1125 (D.C. Cir.
2017).
\14\Id. (internal citations omitted).
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JOINT EMPLOYMENT
Labor and employment laws have long held that when the
company that signs a worker's paycheck shares authority over
terms and conditions of employment with other companies,
multiple businesses may as a result be accountable as employers
for complying with the law. This is referred to as ``joint
employment.''
FLSA and Joint Employment
Joint employment in FLSA arises not only out of the
definition of employer, which ``includes any person acting
directly or indirectly in the interest of an employer in
relation to an employee,''\15\ but also out of the broad
``suffer or permit'' definition of ``employ,'' which Congress
borrowed from the early state child labor laws of the late 19th
and early 20th centuries.\16\ State authorities used this broad
language to hold businesses accountable for child labor
violations despite arrangements such as the ``inside shop,''
where a manufacturer might subdivide the departments of the
business into shops contracted out to other business operators,
who all nevertheless contributed to the manufacturer's
enterprise.\17\
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\15\See 29 U.S.C. Sec. 203(d) (emphasis added).
\16\See generally Goldstein et al., supra note 9.
\17\Id. at 1057-58.
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The Supreme Court first examined FLSA joint employment in
the 1947 case Rutherford Food.\18\ In that case, a
slaughterhouse operator retained an independent contractor to
provide labor for a deboning process, and the deboning
contractor directly hired workers to perform that work.\19\ The
employees worked on the meatpacking company's premises,
received cattle carcasses from the meatpacking company's
employees, deboned the cattle using the meatpacking company's
tools and equipment, and then conveyed the deboned cattle along
an overhead rail to another room where the meatpacking
company's employees continued processing the carcasses into
food products.\20\ During this work, the deboning contractor's
employees were supervised by one of the meatpacking company's
``managing official[s].''\21\ Taking account of ``the
circumstances of the whole activity,'' the Court agreed with
WHD that the deboning employees constituted ``a part of the
integrated unit of production under such circumstances that the
workers performing the task were employees of the
establishment.''\22\
---------------------------------------------------------------------------
\18\Rutherford Food Corp. v. McComb, 331 U.S. 722 (1947).
\19\Id. at 724-25.
\20\Id. at 726, 730.
\21\Id. at 730.
\22\Id. at 729-30.
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More recently, the U.S. Court of Appeals for the Fourth
Circuit advised that scrutiny of potential joint employer
liability should focus less on the relationship between
business and worker and more on the interrelationships of the
businesses themselves.\23\ In Salinas, the Fourth Circuit
considered wage theft allegations brought by workers employed
by a drywall and framing subcontractor, which almost
exclusively worked on jobs for a construction contractor that
specialized in finishing interiors.\24\ Among other things, the
contractor assessed the final work product of the
subcontractor's employees and required the subcontractor to
order re-execution of work the contractor deemed insufficient;
mandated that the subcontractor's employees wear the
contractor's logo and hold themselves out as employees of the
contractor; and periodically instructed the subcontractor to
dispatch workers to meet the contractor's needs.\25\ Finding
that the contractor was indeed jointly liable with the
subcontractor for FLSA violations, the Salinas court clarified
that joint employment inquiry ``requires courts to determine
whether the putative joint employers are not wholly
disassociated or, put differently, share or codetermine the
essential terms and conditions of a worker's employment.''\26\
---------------------------------------------------------------------------
\23\Salinas v. Commercial Interiors, Inc., 848 F.3d 125 (4th Cir.
2017).
\24\Id.
\25\Id. at 145-46.
\26\Id. at 139.
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Joint employment is not a major factor in FLSA cases. The
National Employment Law Project (NELP) reviewed FLSA
enforcement and litigation in 2019 and found:
there are not very many joint employer cases overall,
as compared to other FLSA cases, despite the [business
community's] pronouncements that the joint employer
question is harming business . . . NELP's research and
case compendium of joint employer cases shows that the
majority arise in FLSA cases brought by agricultural
workers, and over half of all cases do not result in a
finding of joint and several liability.\27\
---------------------------------------------------------------------------
\27\Christine Owens et al., Nat'l Emp. L. Proj., Comments on RIN
1235-AA26: Joint Employer Status Under the Fair Labor Standards Act 3
n.1 (June 25, 2019), https://s27147.pcdn.co/app/uploads/2019/06/
Comments-USDOL-Joint-Employer-Status-FLSA.pdf.
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NLRA and Joint Employment
The NLRA's definition of ``employer'' contemplates that
there can be joint employers in an employment relationship.
Under Section 2(2) of the Act, the term ``employer'' includes
``any person acting as an agent of an employer, directly or
indirectly.''\28\ Likewise, the term ``employee'' is not
limited to the employees of a particular employer. Section 2(3)
of the Act states: ``The term `employee' shall include any
employee, and shall not be limited to the employees of a
particular employer, unless [the Act] explicitly states
otherwise.''\29\
---------------------------------------------------------------------------
\28\See 29 U.S.C. Sec. 152(2) (emphasis added).
\29\See id. Sec. 152(3).
---------------------------------------------------------------------------
For most of the time since the 1935 enactment of the NLRA,
the NLRB has held that an entity may be liable to bargain with
the employees of a subcontractor as a joint employer even if
its control over terms and conditions of employment was
indirect, such as exercised through an intermediary, or
reserved but not yet exercised.\30\ This traditional standard
is consistent with the Supreme Court's requirement that the
NLRB interpret the NLRA's definition of employer as consistent
with the common law,\31\ as well as with the legislative
history of the NLRA's 1947 amendments.\32\
---------------------------------------------------------------------------
\30\See, e.g., Floyd Epperson, 202 NLRB 23, 23 (1973) (finding
proof of joint employment where client employer had ``some indirect
control over [employees''] wages'' and ``some control, albeit indirect,
over [employee] discipline''), enforced 491 F.2d 1390 (6th Cir. 1974);
Franklin Stores Corp., 199 NLRB 52, 53 (1972) (upholding ALJ finding of
joint employment where one employer, ``by virtue of the lease
arrangement with'' the other employer, ``has the right to veto the
employment of employees by'' the other ``and to insist on the discharge
of employees by'' the other).
\31\See NLRB v. United Ins. Co. of America, 390 U.S. 254, 256
(1968) (requiring the Board to ``apply general agency principles in
distinguishing between employees and independent contractors under the
Act'').
\32\See H.R. Rep. No. 80-510, at 32-33 (1947) (Conf. Rep.),
reprinted in 1 Legislative History of the Labor Management Relations
Act, 1947, at 536-37 (1948) (explaining the exclusion of independent
contractors from the definition of employee in order to overturn a
Supreme Court decision that ``held that ordinary tests of the law of
agency could be ignored by the Board'' in determining the existence of
employment relationships).
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SHORTCOMINGS OF THE LEGISLATION
H.R. 4366 proposes to limit workers' protections under
labor and employment laws when there are multiple entities with
the power to determine employment conditions by adopting a
single joint employer test for both NLRA and FLSA, limited to
whether each putative joint employer ``directly, actually, and
immediately exercises significant control over the essential
terms and conditions of employment[,] such as hiring such
employees, discharging such employees, determining the rate of
pay and benefits of such employees, supervising such employees
on a day-to-day basis, assigning such employees a work
schedule, position, or task, or disciplining such
employees.''\33\
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\33\H.R. 4366, 119th Cong. Sec. 2 (2025).
---------------------------------------------------------------------------
Many Bosses, No Employers
The bill injects uncertainty into the very heart of the
employment relationship--an uncertainty that businesses would
be able to exploit at the expense of workers. Under current
law, the joint employer doctrine essentially means that
multiple persons share the obligations of the employer under a
relevant labor or employment law. The bill, however, refers to
a ``joint employer of the employees of another employer,''
which could be construed as conceiving of a true employer and a
subsidiary ``joint'' employer. With workplaces increasingly led
by multiple businesses with complex layers of contracting and
subcontracting,\34\ creating new tiered definitions of employer
and joint employer that deviate so significantly from the long-
established uses of the terms would invite endless litigation
by businesses eager to escape accountability under the nation's
labor and employment laws.
---------------------------------------------------------------------------
\34\See generally David Weil, The Fissured Workplace: Why Work
Became So Bad for So Many and What Can Be Done to Improve It (2014).
---------------------------------------------------------------------------
When this bill was discussed in the Committee in a previous
Congress, one confusion that emerged is whether some workers
may find that they have no employer at all. In a 2017
legislative hearing, Ranking Member Scott raised this concern
with legal expert Michael Rubin:
Mr. Scott: [I]f you have a Fair Labor Standards Acts
violation and somebody comes in and says, ``I'm not an
employer under this definition,'' and then the other
guy comes in and says, ``I'm not an employer under this
definition either,'' is it possible that nobody is
responsible?
Mr. Rubin: Wow. In fact, as I look at the language of
the Act, that is possible. Imagine this circumstance:
Company A is in charge of hiring. Company A and B share
responsibility for firing. And company B also sets
wages. The worker says, who is my employer under this
definition? Well, does either company, A or B, control
the essential terms, which are then listed? There are 9
of them in the conjunctive? No. So in that case there
may be no employer.
Mr. Scott: So if there's a finding that I wasn't paid
overtime, nobody owes it?
Mr. Rubin: Neither company is a joint employer and
arguably neither is an employer at all . . . [T]his
language explodes uncertainty to the point where every
single case, where any element, any term or condition
of employment is shared, there's going to be litigation
over whether either company would be [liable].\35\
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\35\H.R. 3441, Save Local Business Act: Joint Hearing Before the
Subcomm. on Wrkf. Prots. & the Subcomm. on Health, Emp., Lab. &
Pensions of the H. Comm. on Educ. & the Wrkf., 115th Cong. 72 (2017)
(testimony of Michael Rubin) [hereinafter Rubin Testimony].
Even though Committee Democrats have raised this concern
multiple times since, the Majority has not fixed the problem in
the bill.
Hampering Effective Labor Organizing and Negotiation
The bill would narrow the current joint employer test for
the NLRA by eliminating the consideration of indirect or
reserved control. Under the common law, the employer does not
need to exercise direct and immediate control in order to
determine the essential terms and conditions of employment,
because a presumed joint employer can limit the wages and
benefits paid by the employees' direct employers through
contractual arrangements, such as salary caps.
As a result, workers would be hampered from effectively
organizing and negotiating with all of their employers.
According to the Economic Policy Institute (EPI), this form of
a stringent NLRA joint-employer standard ``would result in an
annual transfer of $1.3 billion from workers to
employers.''\36\ Such a standard would have consequences not
only for employees of smaller firms in a set of related firms,
who would be unable to bargain with the lead firm in the chain
with the power to determine wages and other conditions, but
also for employees of the lead firm, whose bargaining power
would be diluted by working with employees of less powerful
firms but with whom they are not able to join in any bargaining
scenario.
---------------------------------------------------------------------------
\36\Celine McNicholas & Heidi Shierholz, EPI Comments Regarding the
Standard for Determining Joint-Employer Status, Econ. Pol. Inst. (Dec.
9, 2018), https://www.epi.org/publication/epi-comments-regarding-the-
standard-for-determining-joint-employer-status/.
---------------------------------------------------------------------------
Open Invitation to Wage Theft
This bill dramatically narrows who is liable as a joint
employer under the FLSA and would allow low-road companies to
benefit from workers' labor while shirking any responsibility
to them simply by using an intermediary contractor. Michael
Rubin explained this likely consequence in his 2017 testimony
by describing a FLSA case he litigated:
In a case we settled a few years ago in Southern
California, hundreds of hard-working warehouse workers
were employed in four warehouses, loading and unloading
trucks for deliveries to Walmart distribution centers
throughout the country. Walmart owned the warehouses
and all of their contents. It contracted with a
subsidiary of Schneider Logistics, Inc. to operate the
warehouses. Schneider, in turn, retained two labor
services subcontractors who hired the warehouse
workers. By contract, all responsibility for legal
compliance rested solely with those two labor services
subcontractors. Yet Walmart and Schneider had kept for
themselves the contractual right to control almost
every aspect of those warehouse workers' employment,
directly and indirectly.
The violations we found in those warehouses were
egregious. But the only reason the workers were
eventually able to obtain relief--through a $22.7
million settlement that resulted in many class members
receiving tens of thousands of dollars each as
compensation--was because the warehouse workers had
demonstrated a likelihood of success in proving that
Walmart and Schneider, as well as the staffing
agencies, were the workers' joint employers. The two
staffing agencies were undercapitalized. . . . Only
because the federal courts focused on the actual
working relationships in those warehouses, as other
courts have done in other joint-employer cases under
the NLRA and FLSA, were the workers able to retain
compensation for past violations, to obtain higher
wages and significant benefits, and to have deterred
future violations.\37\
---------------------------------------------------------------------------
\37\Rubin Testimony, supra note 35, at 30.
When Rep. Mark Takano (D-CA) asked what these workers'
remedy would be under the narrowed definition of joint
employer, Mr. Rubin's response was bleak: ``They would have no
remedy at all. Their only recourse would be against the labor
services contractor,'' who could only pay roughly 7% of the
total settlement amount.\38\
---------------------------------------------------------------------------
\38\Id. at 63.
---------------------------------------------------------------------------
Turning Back the Clock on Child Labor
Narrowing the definition of joint employer so significantly
would turn back the clock on child labor protections. The word
suffer in FLSA's ``suffer or permit to work'' clause means to
acquiesce in, passively allow, or to fail to prevent the
worker's work.\39\ Current law, therefore, enables the
government to pursue child labor violations not only against
the employer of record but also any business in a position to
stop the violation that elects, nevertheless, to benefit from
it.
---------------------------------------------------------------------------
\39\Bruce Goldstein, Statement on H.R. 3441 (Oct. 2, 2017), http://
democrats-edworkforce .house.gov/imo/media/doc/
ESPAILLAT_FWJ%20Statement%20H.R%203441%20Jt Employer.pdf.
---------------------------------------------------------------------------
This narrowed definition, however, would enable lead
companies in a chain of contracting to turn a blind eye to
child labor, even on their own premises, so long as they do not
actually exercise direct control over the illegally employed
children. In accordance with current law, two of the nation's
largest meatpacking companies recently settled with WHD for a
combined $8 million in civil monetary penalties after WHD
discovered that the companies had for years benefited from
illegal child labor supplied at the companies' plants by
outside contractors.\40\ In the world created by this bill,
however, the meatpacking companies would likely have been able
to point the finger at their contractors and return to business
as usual without consequence.
---------------------------------------------------------------------------
\40\Hannah Dreier, Meatpacking Companies to Pay $8 Million for U.S.
Child Labor Violations, N.Y. Times (Jan. 16, 2025), https://
www.nytimes.com/2025/01/16/us/perdue-jbs-slaughterhouses-child-
labor.html.
---------------------------------------------------------------------------
This threat comes at a time when child labor is on the
rise. Recent high-profile exposes of companies illegally
employing and overworking children in dangerous jobs have
unveiled the horrific reality behind child labor statistics
with story after story of young children working under
hazardous conditions, staffing overnight shifts, handling
dangerous chemicals, and forgoing school.\41\ According to WHD
data, the number of children involved in child labor
skyrocketed nearly 300 percent from Fiscal Year 2015 to Fiscal
Year 2024--and these are just the cases that have been
detected.\42\ WHD is so resource-strapped that inspectors in a
dozen states told the New York Times ``their understaffed
offices could barely respond to complaints, much less open
original investigations.''\43\
---------------------------------------------------------------------------
\41\A New Child Labor Crisis in America, N.Y. Times (Mar. 9, 2023),
https://www.nytimes.com/2023/03/09/podcasts/the-daily/migrant-child-
labor-america.html; David J. Neal, A Restaurant's Florida Franchisees
Illegally Used Child Labor and Owed Workers $24,000, Miami Herald (Mar.
8, 2023), https://www.miamiherald.com/news/business/
article272835475.html; How Child Labor Violations Have Quadrupled Since
2015, 1A: NPR (Mar. 6, 2023), https://www.npr.org/2023/03/06/
1161486299/how-child-labor-violations-have-quadrupled-since-2015;
Nandita Bose & Mica Rosenberg, U.S. to Crack Down on Child Labor Amid
Massive Uptick, Reuters (Feb. 27, 2023), https://www.reuters.com/
business/us-crack-down-child-labor-amid-massive-uptick-2023-02-27/;
Hannah Dreier, Alone and Exploited, Migrant Children Work Brutal Jobs
Across the U.S., N.Y. Times (Feb. 25, 2023), https://www.nytimes.com/
2023/02/25/us/unaccompanied-migrant-child-workers-exploitation.html;
Terri Gerstein, Child Labor Has Made a Comeback, Slate (Nov. 16, 2022),
https://slate.com/business/2022/11/packers-sanitation-child-labor-
department-hyundai-chipotle.html.
\42\See Wage & Hr. Div., Child Labor, U.S. Dep't of Lab., https://
www.dol.gov/agencies/whd/data/charts/child-labor (last visited May 29,
2025).
\43\Dreier, supra note 41.
---------------------------------------------------------------------------
Republican lawmakers appear keen to roll back child labor
protections. GOP lawmakers in state legislatures have
introduced multiple bills to roll back state child labor laws.
According to EPI, at least 31 states have introduced or passed
such bills since 2021.\44\ (Advocates have recently begun a
counter-movement of state legislation to improve child labor
protections.\45\) Florida Governor Ron DeSantis even provided
state lawmakers a draft bill with the message that teens could
replace immigrant workers the state may be losing to President
Trump's immigration enforcement efforts.\46\
---------------------------------------------------------------------------
\44\Child Labor, Econ. Pol. Inst., https://www.epi.org/research/
child-labor/ (last visited Mar. 17, 2025).
\45\Nina Mast, More States Have Strengthened Child Labor Laws Than
Weakened Them in 2024, Econ. Pol. Inst. (June 12, 2024), https://
www.epi.org/blog/more-states-have-strengthened-child-labor-laws-than-
weakened-them-in-2024-this-year-state-advocates-were-better-equipped-
to-organize-in-opposition-to-harmful-bills/. Most recently, the State
of Washington passed legislation increasing child labor maximum
penalties, setting new mini-mum penalties, barring violators from
employing children, and banning violators from bidding on public works.
Nicole Black, Washington Governor Signs Landmark Child Labor Protection
Bill into Law Amid Rising Workplace Injuries for Minors, Hoodline (Apr.
29, 2025), https://hoodline.com/2025/04/washington-governor-signs-
landmark-child-labor-protection-bill-into-law-amid-rising-workplace-
injuries-for-minors/. The legislation comes in the aftermath of 750
child worker injuries in the state in 2023 and the state's first ever
felony child labor prosecution of an employer of a 16-year-old who lost
both his legs in a work experience program while using machinery not
allowed under state (or federal) child labor rules. Lizz Giordano,
Washington Seeks Felony Charges After Teen Loses Legs, Nw. Lab. P.
(Apr. 30, 2025), https://nwlaborpress.org/2025/04/washington-seeks-
felony-charges-after-teen-loses-legs/.
\46\McKenna Schueler, Florida Gov. Ron DeSantis Pushed for Child
Labor Rollbacks Behind the Scenes, Records Show, Orlando Wkly. (Apr. 8,
2025), https://www.orlandoweekly.com/news/florida-gov-ron-desantis-
pushed-for-child-labor-rollbacks-behind-the-scenes-records-show-
39246707; John Kennedy, All Work Restrictions Would Be Lifted on 16-
and 17-Year-Olds in Florida Under New Bill, Tallahassee Dem. (Mar. 25,
2025), https://www.tallahassee.com/story/news/local/state/2025/03/25/
florida-teens-would-have-work-limits-lifted-under-new-legislation/
82598988007/.
---------------------------------------------------------------------------
Child labor rollbacks are also on the agenda for Project
2025,\47\ a radical blueprint for the Trump-Vance
Administration developed by the Heritage Foundation with a team
with at least 140 former officials from the first Trump
Administration and campaign.\48\ While President Trump
repudiated Project 2025 during the campaign,\49\ his actions
thus far in his second term have drawn directly from it.\50\
Project 2025 calls for eliminating the WHD child labor rules
that prohibit children from being employed in certain jobs DOL
deems particularly hazardous.\51\ Among jobs that would be
opened to children are meat and poultry processing, roofing,
shipbreaking, logging, pesticide handling, and even jobs with
exposures to radioactive substances.\52\
---------------------------------------------------------------------------
\47\See Project 2025, Heritage Foundation, Mandate for Leadership:
The Conservative Promise (Paul Dans & Steven Groves eds. 2023), https:/
/static.project2025.org/2025_MandateForLeadership_FULL.pdf.
\48\Elena Shao & Ashley Wu, The Many Links Between Project 2025 and
Trump's World, N.Y. Times (Oct. 22, 2024), https://www.nytimes.com/
interactive/2024/10/22/us/politics/project-2025-trump-heritage-
foundation.html.
\49\Vaughn Hillyard & Alexandra Marquez, Trump Disavows Project
2025, But He Has Long-Standing Ties to Some Key Architects, NBC News
(Jul. 11, 2024), https://www.nbcnews.com/
politics/donald-trump/project-2025-trump-heritage-foundation-what-know-
rcna161338.
\50\Steve Contorno & Casey Tolan, Trump Said He Hadn't Read Project
2025--But Most of His Early Executive Actions Overlap with Its
Proposals, CNN (Jan. 31, 2025), https://www.cnn.com/2025/01/31/
politics/trump-policy-project-2025-executive-orders-invs/index.html;
Elena Shao et al., How Trump's Directives Echo Project 2025, N.Y. Times
(Feb. 14, 2025), https://www.nytimes.com /interactive/2025/02/14/us/
politics/project-2025-trump-actions.html.
\51\Project 2025, supra note 47, at 595.
\52\For a summary of currently prohibited jobs, see https://
webapps.dol.gov/elaws/whd/flsa/docs/haznonag.asp (non-agricultural) and
https://webapps.dol.gov/elaws/whd/flsa/docs/hazag.asp (agricultural).
---------------------------------------------------------------------------
DEMOCRATIC AMENDMENTS OFFERED DURING
THE MARKUP OF H.R. 4366
Committee Democrats put forward one amendment to improve
the bill. It would have prevented the application of the
legislation's joint employer standard in child labor cases.
------------------------------------------------------------------------
AMENDMENT OFFERED BY DESCRIPTION ACTION TAKEN
------------------------------------------------------------------------
#2......... Ms. Adams........ Section 2(b) shall not Defeated
apply in cases
relating to child
labor.
------------------------------------------------------------------------
Committee Republicans rejected the amendment.
CONCLUSION
For the reasons stated above, Committee Democrats
unanimously opposed H.R. 4366 when the Committee on Education
and Workforce considered it on July 23, 2025. We urge the House
of Representatives to do the same.
Robert C. ``Bobby'' Scott,
Ranking Member.
Suzanne Bonamici,
Mark DeSaulnier,
Summer Lee,
Adelita Grijalva,
Members of Congress.
[all]