On Wednesday, Republican Georgia Congressman Rick Allen joined 68 of his Republican colleagues in writing a letter to the National Labor Relations Board (NLRB) opposing the Board’s proposed joint employer proposed rule that would be damaging to the U.S. economy and American workers.
Under the proposed rule that was announced in September, two or more employers would be considered joint employers if they “share or codetermine those matters governing employees’ essential terms and conditions of employment,” like “wages, benefits and other compensation, work and scheduling, hiring and discharge, discipline, workplace health and safety, supervision, assignment, and work rules.”
As explained in a press release from Republican Senator Ron Johnson’s (WI) office, “In the United States, there are nearly 775,000 franchises that employ 8.2 million workers and provide $800 billion of economic output. This is projected to grow in 2022 to nearly 800,000 franchises. Businesses such as universities, hospitals, home healthcare, agriculture, cleaning services, security services, hospitality, waste management, delivery services, home builders, retailers, and others that contract or subcontract would be negatively affected.”
According to the International Franchise Association (IFA), the BFI joint employer standard – which is nearly identical to the proposed rule – would “cost franchise businesses $33.3 billion per year, resulting in 376,000 lost job opportunities, and led to a 93% increase in lawsuits.”
The letter from Georgia Rep. Rick Allen (R) and other Republicans explained, “The Board’s joint-employer proposed rule would have immediate and long-term negative effects on millions of workers and thousands of businesses at a time when the economy is already facing the highest inflation rates in four decades. Franchises in particular would be negatively impacted should the proposed rule go into effect. Franchises cover over 300 different business lines, including restaurants, child care, hair care, fitness, tutoring, amusement parks, automotive repair, lodging, and senior care. Additionally, the proposed rule would cost franchise job opportunities that provide up to nearly four percent higher wages for their employees when compared to non-franchise counterparts.”
“Due to this negative economic impact, the proposed rule’s inconsistency with common law, and the NLRB’s attempt to use powers reserved to Congress, we urge the Board not to move forward with its proposed rule for determining joint-employer status. Instead, the Board should maintain the 2020 rule, which brought clarity and certainty to the business community,” the lawmakers continued.
