The NCCR has voiced concern about new vague standards from the U.S. Labor Department.
The joint employer standards issued by the U.S. Labor Department are being called a misguided intrusion in the affairs of America’s small businesses by The National Council of Chain Restaurants.
“The Labor Department is codifying a radical concept of employer-employee relationships and it is the most aggressive attempt yet to build on the flimsy foundation built by the NLRB’s Browning Ferris decision,” NCCR executive director Rob Green said. “Trial lawyers will love the new lawsuits that will be result of this policy. We call on Congress to review this new policy as soon as possible.”
“Federal bureaucrats shouldn’t have the final say in the daily affairs of operating small businesses, including chain restaurants,” Green said. “Setting up intentionally vague standards to govern the relationship between different businesses, including subcontractors and franchisees, is a recipe for confusion, litigation and overzealous enforcement.”
Guidelines released by the Labor Department’s Wage and Hour Division would set a broad definition of what can be considered a joint employer, using language from the Fair Labor Standards Act and the Migrant and Seasonal Agricultural Worker Protection Act that defines employment as “to suffer or permit to work.” By contrast, National Labor Relations Act provisions cited by the NLRB in its joint employer rulings last year require an element of “directing and controlling.”
The current debate over joint employers began last year at the NLRB, but Wage and Hour is the third federal agency to become involved. Labor’s Occupational Safety and Health Administration is also considering whether to broaden the definition it uses, looking at whether franchisers can be held responsible for franchisees’ safety and health violations.
Under guidelines followed for more than 30 years, the NLRB held that a company had to have direct control over the actions of a subcontractor or franchisee’s employees in order to be considered a joint employer. However, in an August 2015 ruling involving the waste management company Browning Ferris Industries and staffing agency Leadpoint Business Services, the NLRB said a company could be considered a joint employer even if it had only indirect or unexercised control. In a separate case, the NLRB said McDonald’s could be considered a joint employer with its restaurant franchisees.
The National Council of Chain Restaurants is the leading trade association exclusively representing chain restaurant companies. For more than 40 years, NCCR has worked to advance sound public policy that best serves the interests of restaurant businesses and the millions of people they employ. NCCR members include the country’s most-respected quick-service and table-service chains. NCCR is a division of the National Retail Federation, the world’s largest retail trade group.