ICYMI: Labor Department Actions a Good Sign for Small Biz and Startups

By at 8 June, 2017, 10:09 am



It’s refreshing to have Labor Department leadership and staff who actually listen to entrepreneurs

Washington, D.C.   – The U.S. Department of Labor (DoL) is listening to entrepreneurs and providing relief from Obama Administration actions and rules that imposed excessive burdens on their small businesses.  Small Business & Entrepreneurship Council (SBE Council) president & CEO Karen Kerrigan said the latest round of DoL announcements this week relating to the “joint employer” standard and independent contractors provides some clarity and hope to business owners and entrepreneurs nationwide.  U.S. Labor Secretary Alexander Acosta also told a U.S. House committee on June 7, that he will likely revisit the overtime rule and open a public comment period on the matter in the coming weeks.

“On a range of burdensome actions and rules pursued and implemented by President Obama’s Labor Department, the concerns of small businesses were ignored or dismissed.  It’s refreshing to now have leadership and staff who actually listen to entrepreneurs and small businesses,” said Kerrigan.

On June 7, Secretary Acosta announced the withdrawal of the department’s 2015 and 2016 informal guidance on joint employment and independent contractors. The guidance put companies at additional legal risk for workplace violations committed by subcontractors and franchisees, and created more complexity and uncertainty for many firms.  With respect to independent contractors, Obama-era guidance applied a very broad definition when investigating a company’s practices with regard to the Fair Labor Standards Act.

“Creating legal and operational uncertainty for businesses, as imposed by the Obama-era guidance, hugely disadvantaged small businesses.  This regulatory cloud was toxic for startup activity and small business growth. The DoL is moving in the right direction by withdrawing this unfair guidance,” added Kerrigan.

While the withdrawal of the guidance is a positive step for small businesses, SBE Council and its allies in the small business community are still pushing for a legislative remedy in the Congress to return joint employer to its previous standard.  The National Labor Relations Board ruling in the Browning-Ferris stands unless a court reverses the ruling or a new case tests the extreme ruling.  SBE Council is also working on efforts to modernize the outdated and arbitrary independent contractor test.

Read Myths vs. Facts on the NLRB’s controversial Browning-Ferris decision.

Read the coalition letter to Congressional leaders on the need for a permanent fix to “joint employer.”

Contact: Karen Kerrigan, 703-242-5840 or

SBE Council is a nonpartisan, nonprofit advocacy, research and education organization that works to protect small business and promote entrepreneurship. For nearly 25 years SBE Council has worked to successfully implement a range of policy and private sector initiatives to strengthen the ecosystem for startups and small business growth. To learn more, visit SBE Council’s website: Follow on Twitter: @SBECouncil

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