HR-4366-119
Rule H. Res. 988 passed House.
Sponsored by James Comer (R-KY)
What it does
This bill would amend the National Labor Relations Act and the Fair Labor Standards Act so that a company can only be considered a "joint employer" of another company's workers if it directly, actually, and immediately exercises significant control over essential terms like hiring, firing, pay, scheduling, and day-to-day supervision. This would replace broader standards—including ones adopted through National Labor Relations Board rulemaking—that allowed indirect or reserved (but unexercised) control to count toward joint-employer status.
Who benefits
Franchisors (such as fast-food and hotel chains), staffing agencies, companies that use contractors or subcontractors, and businesses in supply chains that rely on outsourced labor, since they would face reduced liability for labor violations and reduced obligation to bargain with workers employed by franchisees or contractors.
Who is hurt
Workers employed by franchisees, staffing agencies, and subcontractors, who may find it harder to hold the larger parent company responsible for wage violations, unsafe conditions, or unfair labor practices, or to force it to the bargaining table; unions representing these workers would lose leverage in organizing across franchise and contractor networks.
Supporters argue
Supporters argue that the current joint-employer standard, especially as broadened by NLRB rulemaking in 2023, creates legal uncertainty for franchisors and businesses that use contractors, discouraging franchising and small business formation. They contend that requiring direct and immediate control over essential terms restores a predictable, decades-old legal standard that lets franchisors provide brand support without becoming liable as an employer for franchisees' independent workforce decisions.
Opponents argue
Opponents argue that narrowing the joint-employer standard lets large corporations that structure their business through franchising or subcontracting evade responsibility for labor law violations while still exercising real economic control over those workers' conditions. They contend this would weaken workers' ability to bargain collectively with the entity that actually sets wages and policies, citing the NLRB's own findings that fissured workplace structures have been used to limit employer accountability.
Constitutional context
Congress has broad authority under the Commerce Clause to define employment relationships covered by federal labor statutes, and courts post-Loper Bright v. Raimondo (2024) would independently review any NLRB or Department of Labor interpretation of this statutory language rather than deferring to agency judgment. This bill also reflects Congress reasserting statutory control over a definition the NLRB previously set through rulemaking, an area touching the major questions and agency-deference doctrines.
Checks and balances
Congress would exercise its Article I lawmaking power to override and constrain NLRB and Department of Labor rulemaking discretion on joint-employer standards, with courts retaining independent authority to interpret the new statutory text under post-Chevron review.
Historical precedent
Similar joint-employer legislation passed the House in 2017 and 2018 but did not become law, and the NLRB itself has repeatedly changed the joint-employer standard through rulemaking and adjudication (2015 Browning-Ferris decision, 2020 rule, 2023 rule), reflecting an ongoing back-and-forth between the agency and Congress over this definition.