Obama-era Labor Rule Still Threatens the Economy

In a new op-ed in the Washington Examiner, AAF’s Director of Labor Market Policy Ben Gitis explains the danger that the broadened “joint employer standard” poses to the economy. The standard, which the Obama Administration expanded, impacts nearly half of the labor force and demonstrably slows job growth, Gitis writes.

“The broadened joint employer standard inherently reduces the incentive for firms to enter business relationships, lowering productivity and costing jobs in contract and franchise companies. Making matters worse, the NLRB’s new standard is highly ambiguous, holding companies as joint employers if they have “direct or indirect control” of employment and pay in separate firms. The new standard has created significant uncertainty about which firms are joint employers, as “direct or indirect control” could apply to any number of business arrangements. As a result, production is likely lower than it otherwise might be, as a large number of firms could be unnecessarily reluctant to enter business arrangements or limiting coordination between themselves and another firm’s workers.”

Read the full op-ed here.