Bill Would Cement Definition of Joint Employers as Organizations with Direct Control

A new bill aims to clarify that a company can only be considered a joint employer if it directly and immediately exercises meaningful control over workers’ essential terms and conditions of employment.

Rep. James Comer (R-KY) introduced the Save Local Business Act on July 15. The bill is a reaction to the National Labor Relations Board’s (NLRB) frequent redefining in recent years of which companies can be considered joint employers and are therefore required to participate in collective bargaining or could be held liable for workplace conditions. In 2023, under the Biden administration, the NLRB issued a new rule revising the joint employer rule to cover any entity that had the right to exercise control, including indirect control, over an employee. That version of the rule was vacated by a U.S. district court in 2024, reinstating the 2020 rule that said joint employers had to have direct control.

The Save Local Business Act seeks to enshrine the 2020 definition by amending the National Labor Relations Act and the Fair Labor Standards Act. Seventy-two business advocacy groups and trade associations, including FEDA, signed a letter to Congress supporting the legislation. “[The bill] would provide the regulated community with the clarity and predictability it needs to comply with the law and plan for the future,” the letter states. “It would safeguard pathways to the American Dream by protecting proven business models that allow small businesses and entrepreneurs to offer their services, expand and thrive.”

The full letter is available here.