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Washington — The House Education and Workforce Committee approved separate bills related to independent contractors and joint employers during a July 23 markup.
The Modern Worker Empowerment Act (H.R. 1319) would alter definitions in the Fair Labor Standards Act of 1938 and the National Labor Relations Act of 1935. A worker would be an employee only if another person or entity exercises “significant control over the details of the way the work is performed by the individual” and “while performing such work, the individual has the opportunities and risks inherent with entrepreneurship, such as the discretion to exercise managerial skill, business acumen or professional judgment.”
That definition is similar to one used in a Department of Labor final rule published on Jan. 7, 2021, just weeks before the end of the first Trump administration. That rule was rescinded months later by the Biden administration, which published its own rule in 2024.
“As expert witnesses have told the (House) Subcommittee on Workforce Protections, many businesses have experienced administrative whiplash from regulatory changes affecting independent workers,” Rep. Tim Walberg (R-MI), who chairs the Education and Workforce Committee, said in his opening statement during the markup. “The Modern Worker Empowerment Act will provide certainty for many businesses and independent contractors.”
Rep. Bobby Scott (D-VA), the committee’s ranking member, contended that by narrowing the scope of the FLSA and NLRA, “this bill makes it more difficult for workers who have been misclassified as independent contractors to receive overtime pay, fair wages and other basic rights under the law.”
Scott continued: “By codifying the pervasive trend of employers misclassifying their employees as independent contractors, this bill strips workers of their basic wage and hour protections and leaves law-abiding businesses at a competitive disadvantage. Independent contractors do not get the same protections as wage and hour employees, such as minimum wage, overtime, unemployment compensation, workers’ compensation, access to employee health care and benefits, pensions, OSHA protections, and the right to organize.”
Joint-employer bill
The term “significant control” was also used in another bill the committee approved on July 23: the Save Local Business Act (H.R. 4366). It would change the NLRA to state:
“An employer may be considered a joint employer of the employees of another employer only if each employer directly, actually, and immediately exercises significant control over the essential terms and conditions of employment of the employees of the other employer, such as hiring such employees; discharging such employees; determining the rate of pay and benefits of such employees; supervising such employees on a day-to-day basis; assigning such employees a work schedule, position or task; or disciplining such employees.”
In his opening statement before the markup, Walberg said: “This legislation will set one commonsense joint-employer test so that job creators will have clarity about what the law is and certainty for the future. For too long, we have allowed the National Labor Relations Board and DOL to determine their respective joint-employer tests, resulting in tests that change with every presidential administration.”
Scott, meanwhile, claimed the bill “does just the opposite of what its name suggests.”
“By rewriting the rules on who counts as a joint employer, this bill strips workers of protections they have relied on for decades and leaves small businesses responsible for actions taken by a completely different company,” he continued. “If more than one company controls your job, both should be held accountable under the joint-employer laws.
“This bill lets the real decision-makers off the hook and makes it harder for workers to fight back when they are underpaid, mistreated or ignored at the bargaining table, and even creates a situation where technically no one could be the employer.”
He added that the bill would also make child labor violations “easier.”
Scott said: “Congress intentionally used a broad definition of employment in the Fair Labor Standards Act because it was borrowing language from early state child labor laws.
“State lawmakers frequently found that businesses would splinter themselves through contracting and subcontracting to benefit from child labor without penalty. … This bill, however, would narrow that definition, turning back the clock to a time when children did not benefit from the broadest possible protection of the law.”
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Original article published by Safety+Health an NSC publication