When They Talk About Joint Employers, Republicans Are Either Lying or Confused

Now that Republicans in Congress are about to get a President who will sign their bills into law, they are eager to overturn even the most modest pro-worker measures that President Obama’s appointees were able to implement.  One of the top items on the chopping block is the “joint employer” standard that the NLRB announced in 2015 in its Browning-Ferris Industries decision.  What’s unfortunate is that rather than debate the Board’s decision on the merits, Republicans in Congress insist upon misrepresenting the decision and its effects.

Consider a recent column by Representative Bradley Byrne, who sits on the House Education and the Workforce Committee.  He wrote, “[t]here may be no regulation that threatens to crush small businesses and working people more than a recent ruling from the National Labor Relations Board relating to the definition of a ‘joint employer.’”  Byrne asserts that the ruling will make big firms liable for the actions of small firms, and thus they are “unlikely to do business with them anymore.”  This is simply wrong.  Joint employers are not automatically liable for each other’s actions.  Instead, under long-settled Board law, a non-acting joint employer is only liable where it knew or should have known that the other employer acted for unlawful reasons.  Apart from being wrong as a matter of law, the claim is absurd as a matter of common sense.  It’s like saying no homeowner would ever hire an electrician because there are some circumstances where the homeowner could be liable for actions taken by the electrician.  In fact, the Browning-Ferris decision wasn’t about liability, but rather about the right of workers to bargain with actual decision-makers.  The workers in Browning-Ferris were employed by a staffing agency, but Browning-Ferris retained the right to dictate who could work at the facility, it set schedules, controlled the speed of the production line, and imposed a maximum wage rate for the agency’s employees.  When the workers formed a union, they wanted the right to bring Browning-Ferris to the table, so that they could bargain about these vital issues.  Byrne also makes the unsupported claim that 600,000 jobs “could be either lost or not created” because of the Browning-Ferris decision.  But, at most, the decision might lead big firms to follow a different business model – if big firms choose to hire workers directly rather than through intermediaries, the workers’ jobs won’t disappear.

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Today’s News & Commentary — December 26, 2016

USA Today has a survey of what will happen to worker pay and benefits in 2017. The short version: States may continue to raise minimum wages, and there’s a small chance the federal minimum wage will rise to $10 an hour. Regarding overtime pay, a federal judge’s potential overturning of the Obama Administration’s mandate may have a dampened effect: “Many businesses already have increased managers’ salaries to the $47,476 threshold to avoid paying overtime or converted salaried staffers to hourly employees so their hours can be tracked for overtime.” The article goes on to predict the future of the joint employer rule, paid family and sick leave, and subsidized child care.

CNBC explores this “staying power” of the overtime rule in some more detail. Despite the lawsuit, the article notes, the rule’s effects were already underway. Compensation information and research company PayScale analyzed over 500 jobs that offered salaries between the new and old thresholds and “found that the number making in between those two numbers dropped sharply over the past two quarters.” Furthermore, 40 percent of the corporate clients of Salary.com, a compensation and software analytics firm, had made raises over the threshold or had reclassified workers.

For those of you into “very wonkish” economics, Paul Krugman at the New York Times has an analysis of trade deficits’ effects on manufacturing jobs. For those of us who are not, his bottom line: “yes, trade deficits reduce manufacturing production and jobs. They played a significant although far from dominant role in manufacturing job losses after 2000.”

Picking the New Secretary of Labor: A Backgrounder on Andrew Puzder

President-elect Donald Trump met this weekend with Andrew Puzder, one of his rumored candidates for Secretary of Labor.  Like Trump, Puzder is a Washington outsider: he’s the longtime CEO of CKE Restaurants, the company that owns fast-food chains Hardee’s and Carl’s, Jr.  Puzder has been one of Trump’s staunchest supporters — advising him and fundraising for him on the campaign trail — as well as an outspoken critic of the Obama administration.  On his personal blog and elsewhere, Puzder has made no secret of his pro-business stance on labor issues.  Here’s what we know.
Minimum Wage
As The Atlantic reports, Puzder has voiced strong opposition to a higher minimum wage.  He has argued (more than once) that raising the minimum wage and mandating benefits (like paid leave and health insurance) will end up hurting workers, predicting that businesses will respond to higher labor costs with “price increases, more efficient labor management, and automation.”  (He himself has decided to invest in automation at Carl’s, Jr. restaurants, replacing workers with machines because “[machines] never take a vacation, they never show up late, there’s never a slip-and-fall, or an age, sex, or race discrimination case.”)  
Puzder has also taken aim at government benefits.  His proposed solution to sluggish job growth is “more work, less welfare” — according to him, programs like SNAP and Medicaid have distorted incentives, creating a “welfare cliff” that discourages low-income workers from working more for fear of losing their benefits.
Puzder has also complained about Obamacare’s impact on the economy, claiming that Americans are spending less because of higher health insurance premiums.

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The Obama Board’s Legacy – Part 2 of 2

This post is the second in a two-part series.

This is the second of a two-part retrospective on President Obama’s NLRB.  The first part addressed how confirmation fights led to three Supreme Court cases and contributed to a change in the filibuster rules.  This part will focus on the Board’s substantive record.

The Agency Tries to Become Relevant in Non-Union Workplaces

As the percentage of workers who belong to unions has shrunk, by the time President Obama took office the NLRB had become increasingly irrelevant in the lives of most workers.  The Board addressed this by promulgating a rule that required employers to post a notice informing workers of their rights under the NLRA.  Even though virtually every federal employment law requires similar notice posting, a very right-wing D.C. Circuit panel held that the rule violated employers’ First Amendment rights.

The Board may end up having a huge impact on non-union workplaces across the country if the Supreme Court upholds its ruling in Murphy Oil that employers may not require workers to sign agreements that prohibit workers from pursuing their legal claims collectively.  According to the National Employment Lawyer Association, in 2010, 27 percent of employers required workers to sign arbitration agreements, and those arbitration agreements typically prohibit collective or class actions.  If it survives review by the Court, Murphy Oil will become by far the most significant NLRB decision in many years.  

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Today’s News & Commentary — June 30, 2016

The New York Times reports that collapsed economic prospects in Nepal have driven many Nepalis to work in Afghanistan as security guards at foreign embassies.  In addition to enjoying fewer privileges than their “white brothers” and having to pay thousands of dollars in broker fees, they are taken around Kabul in ordinary minibuses, as opposed to the armored cars that protect many Western contractors.  This can have deadly consequences: last week a Taliban suicide bomber struck the guards’ commuter bus, killing 13 Nepalese and two Indian contractors who worked as security guards at the Canadian embassy.  The attack was one of the deadliest on foreign workers in Kabul, and served as “another example of how the South Asian contractors who have become mainstays in places like Afghanistan and Iraq are vulnerable in ways that many of their Western counterparts are not.”

On Tuesday, the D.C. Council was scheduled to vote on a “fair scheduling” bill, but Council member Vincent B. Orange (D-At Large) withdrew his proposal before the full council could discuss it or vote.  According to the Washington Post, this constitutes a “minor victory” for the retail and food industries, which have launched a major lobbying effort to kill the bill.  As it currently stands, San Francisco is the only city that bans “just-in-time” scheduling, a practice that requires workers to be available at a moment’s notice.  The practice can minimize labor costs, but it also “wreaks havoc on the lives of low-wage workers.”  The D.C. bill, if passed, “would prohibit employers with more than 40 locations nationwide from changing workers’ schedules less than two weeks in advance.”  If changes are made after that, employees must receive extra compensation.

United Airlines and leaders of its flight attendants’ union, the Association of Flight Attendants, have reached agreement on a new labor contract.  As the New York Times notes, the contract “will unify the cabin crews for the first time since United’s merger with Continental Airlines more than five years ago.”  After the merger, other aspects of the combined airlines were integrated, but the company’s 25,000 flight attendants have continued to operate “as if they still worked for two separate airlines.”  The agreement still requires a vote by the union’s full membership, but if the full union votes yes, flight attendants’ pay will rise to a level that the union says is the highest in the industry.

The Christian Science Monitor explains how the Fight for 15 movement has “reinvigorated elements of the American labor movement,” sparking new efforts to recast century-old labor laws.  Although the Fight for 15 movement started, for many, as a way to earn sufficient wages to “take care of . . . family,” it has spurred change on a much wider scale.  The CS Monitor points to a number of recent changes to illustrate this point: new minimum wage laws in California and New York, as well as in Seattle, San Francisco, and Los Angeles; the Obama administration’s decision to raise the overtime ceiling; the NLRB’s revised standard for  determining joint-employer status; and New York Attorney General Eric Schneiderman’s lawsuit against Domino’s parent company, relying on the expanded definition of a joint-employer to hold it liable for franchisees accused of underpaying workers.

Today’s News & Commentary — May 24, 2016

Nowadays, you can order a pizza by tweeting an emoji and have it delivered to you in a car equipped with a built-in pizza warmer. But technology hasn’t just changed the way that pizza arrives on your doorstep; apparently, it has changed the way that employers underpay workers as well. The New York Times reports that New York Attorney General Eric Schneiderman has filed a lawsuit against Domino’s Pizza alleging that the computer system it provides its franchisees “systematically undercounted hours worked by employees, shortchanging them hundreds of thousands of dollars.” The suit comes on the heels of a number of recent legal victories against Domino’s franchisees in the Empire State, but differs from those actions in that it targets the franchiser for “forcing franchisees to use a computer accounting system even though it was aware it was flawed.” In fact, Schneiderman claims, “Domino’s corporate executives knew about the violations, denied responsibility and failed to take action.” Accordingly, Schneiderman promises to “prove that the Domino’s corporate franchiser is legally responsible for rampant wage theft occurring at its stores.” Exactly how rampant is the problem? According to Schneiderman’s office, “78 percent of franchisees listed instances of subminimum wages, and 86 percent . . . listed instances of unlawfully low overtime rates.”

As the recent dust-up over SEIU’s proposed agreement with Airbnb suggests, the growing gig economy has forced a bit of an existential crisis upon organized labor. Writing in Fast Company, Sarah Kessler takes a closer look at how unions are responding to rapidly advancing technology and its spiraling effects on the economy. On the one hand, says SEIU president Mary Kay Henry, “technology gives [unions] a leg up in being able to connect people to each other and activate them.” Some unions have also expressed willingness to organize gig workers, even if the shape of that organization does not fit the contours of a traditional union. On the other hand, however, “[e]ncouraging on-demand companies to rely on a workforce of independent contractors who lack the rights and protections of employees” may be “bad public policy.” That’s why the AFL-CIO — of which SEIU is no longer a part — continues to insist that “working people in the gig economy share a single common designation: employees.”

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Today’s News & Commentary—March 10, 2016

Opening statements are set to begin today in the McDonald’s hearing before an administrative law judge at the NLRB in New York, the Chicago Tribune reports.  This hearing comes almost two years after the NLRB determined that McDonald’s could be held liable as joint employers for franchise operator labor law violations.  On one side, the International Franchise Association warns that holding McDonald’s liable as a joint employer would gradually destroy the franchise model.  On the other, supporters of the designation explain joint employer status would allow labor unions to bargain directly with companies over terms and conditions of employment.

The CEO of Intel announced earlier this week that the company is embarking on a mission to examine how it pays under-represented minorities, including Hispanics, African-Americans and Native Americans.  According to the Huffington Post, the company’s audit will cover about 50,000 employees nationwide at all levels, and Intel will publish the results and the end of the year.  According to the Post and Census data, the racial pay gap has grown over the past few decades: in 1979, black men made 78 cents for every dollar white men made; today, black men make 70 cents on the dollar.  Intel has made diversity a priority over the past decade, but as of 2015, only 3.5 percent of its employees were African-American.  In February, Intel announced the results of its first-ever gender pay audit: there was no gap between what men and women make.

Lydia DePillis at the Washington Post takes a closer look at two leading individuals in government advancing labor law.  Richard Griffin, general counsel and chief prosecutor at the NLRB, brought the case on behalf of McDonald’s workers alleging McDonalds is a joint employer of franchise employees (which will start up in court again today) and last year’s Browning Ferris Industries.  David Weil joined the Department of Labor as wage and hour administrator in 2014, after almost ten years of the post remaining empty, and has worked to update the department to reflect today’s economy, specifically taking on the issue of misclassification.  The two now face resistance from several industries, especially the International Franchise Association.

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