Proposed joint-employer rule would cost working people $1.3 billion in wages annually

The proposed narrowing of the joint-employer standard by the National Labor Relations Board (NLRB) under the National Labor Relations Act (NLRA) would result in fewer joint-employer findings, leaving more workers unable to hold the employers who control key aspects of their jobs accountable for violation of labor law, Economic Policy Institute (EPI) Director of Policy Heidi Shierholz and Director of Government Affairs Celine McNicholas said in recent comments submitted to the NLRB.

Additionally, they said, the proposed rule would make it nearly impossible for workers to bring all firms with the power to influence their wages and working conditions to the bargaining table.

$1.3 BILLION IN LOST WAGES

According to 2017 data from the Bureau of Labor Statistics, there are 2.3 million workers who work for contract firms and temporary help agencies. The data show that 170,000 — 7.4 percent — of these workers are covered by union contracts.

Because the proposed joint-employer rule will make it nearly impossible for these contractors and subcontractors to collectively bargain, the workers would lose out on an estimated $1.3 billion in wages annually.

“The impact of the Board’s proposed rule on joint employers will be significant for the wages of working people and their right to collectively bargain,” said McNicholas. “We urge the Board to maintain the current joint-employer standard as articulated in Browning-Ferris, to strongly oppose any attempt to institute a standard that deprives working people of their rights’ under the NLRA.”

ACTUAL WAGE IMPACT
COULD BE EVEN HIGHER

Shierholz and McNicholas note that their estimate of $1.3 billion in lost wages is a conservative one, due to the nature of the data. In the survey used, workers self-report the firm they work for, which could be mistakenly reported as the firm for which they are they doing their work instead of the agency that placed them at the site. If they included the correct identification of their employer, as well as counting contract workers who are employed by multiple firms and franchise workers, the estimate of lost wages would increase by hundreds of millions of dollars.

“The joint-employer standard should ensure that all businesses that share control over a worker’s pay, hours, and safety, have some responsibility to that worker under the law,” said Shierholz. “Instead, large corporations would benefit from this rule because it creates a loophole that would allow them to shirk their responsibilities under our nation’s labor law, while workers would lose billions.”