The latest Labor Board decision makes small businesses liable for contractors and targeted for unionization efforts.
Small businesses and subcontractors face troubling challenges if last Thursday’s decision by the National Labor Relations Board stands.
In redefining subcontractors as direct employees and franchise businesses as corporate-owned, the board’s narrow 3-2 vote brings in sweeping changes that work against building and operating profitable local enterprises.
NFIB, a member of the Coalition to Save Local Businesses, will push for legislative action against the Browning-Ferris Industries decision, to codify the previous joint employer standard that’s been in place since 1984.
NFIB fights for small businesses on issues similar to this NLRB ruling, such as keeping minimum wage rates in check and minimizing tax burdens. Join NFIB to get your small business concerns heard.
“Many thousands of Americans make a living as subcontractors, and this is a direct threat to them,” said Beth Milito, NFIB Senior Legal Counsel, in a press release. “They want the independence that comes with being their own boss and they want the potential for growth. All of that goes away if there’s no longer any regulatory or financial advantages in hiring subcontractors.”
Under the new ruling, companies that hire staffing firms for office-cleaning functions, for example, will be held directly responsible for the firm’s employees. Not only would the cleaning company be liable for any alleged violation of employment law, but the businesses it serves could be liable as well. Some say the ruling could also make small businesses and staffing firms bigger targets for unions.
“This is very disturbing to many of our members. If the ruling stands, it makes it likely that the reason to hire a subcontractor goes away,” NFIB Media Director Jack Mozloom told The New York Times. “It takes away the financial advantages and removes any regulatory or legal protections that a customer gets from hiring them.”
Here’s some of the reaction on Twitter following the ruling:
NLRB’s decision stifles entrepreneurship & small biz in an already challenging economic & regulatory climate. http://t.co/EaEiOdo80L
— RestaurantsAct (@RestaurantsAct) August 29, 2015
Entrepreneurship and #SmallBiz take a big hit with @NLRB‘s joint employer standard: https://t.co/FJ1PI6stUk @SaveLocalBiz
— SBE Council (@SBECouncil) August 28, 2015
Small biz and franchise advocacy groups tell me they’re not pleased with this one from the #NLRB http://t.co/PGW6GuCKn1
— Kate Rogers (@KateRogersNews) August 28, 2015
NLRB ruling hits franchises. staffing agencies hard. If 2 entities have same worker standards, joined. major impact on small biz.
— 2sbdigest.com (@2sbdigest) August 27, 2015
Feds try to kill more jobs MT:@NFIB “@NLRB … redefines subcontractors as direct employees” will hurt #smallbiz http://t.co/qgAMdk3LXi“
— Matt Shaheen (@MattShaheen) August 27, 2015
“The NLRB’s #JointEmployer proposal would drain the life from the hundreds of thousands of #SmallBiz that operate just like mine.”
— Save Local Business (@SaveLocalBiz) August 27, 2015