House Education & Workforce Committee

To most Americans, the question over who their employer is seems to be an obvious answer. It’s the person who hired them, the one who signs their paycheck.

As a former labor attorney, I can tell you it used to be very clear in legal terms how you become someone’s employer. But that’s no longer the case since the National Labor Relations Board stepped in.

Many people would be shocked to find out that some company they’ve had zero contact with is also considered their employer, in addition to the employer that actually hired them.

Now, we all agree there are times when two or more employers should be deemed “joint employers.” Before the NLRB overstepped, there was a commonsense understanding of the circumstances establishing that joint employer relationship. Both employers had to have “actual, direct, and immediate” control over essential terms and conditions of employment.

This standard made sense. But today, business owners and their employees face a standard vastly different, and far more confusing. They face a situation where a group of unelected bureaucrats in Washington are interfering with their relationship in a way that has created a lot of problems.

The NLRB’s decision and the Obama administration’s actions that followed, in addition to a litany of rulings by activist judges, have inserted a great deal of uncertainty and confusion into the traditional employer-employee relationship. Two completely separate employers can be considered joint employers if they made a business agreement that “indirectly” or “potentially” impacts their employees.

What does that even mean? It’s vague and confusing. Think of it from the employee’s standpoint. There shouldn’t be any room for question on who their employer is.

As for employers, they should have the clarity they need to look out for their employees in the way the law requires. Because in order for employees to have strong protections in the workplace, it needs to be crystal clear who is responsible for providing those protections.

We are here today because we are determined to provide that clarity once and for all and protect jobs and small businesses in our communities. I’m proud to say three of our Democrat colleagues, Representatives Correa, Cuellar, and Peterson, are cosponsors of the Save Local Business Act, and we hope to continue to build bipartisan support so we can restore commonsense to the joint employer issue.

This is an issue of great importance to both of our workforce subcommittees, which is why this critical legislation has been a joint effort with my colleague, Mr. Walberg. Chairwoman Foxx has made the Save Local Business Act a top priority for the full committee, and this hearing will bring us one step closer to moving it through the legislative process.

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 Rep. Virginia Foxx (R-NC), chairwoman of the Committee on Education and the Workforce spoke on the House floor to commemorate the 25th anniversary of the opening of the nation’s first charter school, and praised the hope an opportunity charter schools across the country provide for students and families.

Click here to watch.

 “Mr. Speaker, twenty-five years ago something monumental occurred for students and families who were seeking a new way to pursue a high-quality education.

“Twenty-five years ago, our nation’s first charter school, the City Academy, opened its doors in St. Paul, Minnesota.

“City Academy began a new era for school choice, and provided families with an alternative option to the traditional public school system.

“Today, over 3 million students are enrolled in charter schools, and more than 6,800 have opened in over 40 states.

“Charter schools are not only growing as an option for students, but these schools are also getting results.

“Innovative charter schools are providing thousands of students and families with the hope and opportunity that they can receive a high-quality education, and gain the skills they need to succeed for the future.

“I congratulate City Academy for being a true pioneer in school choice twenty-five years ago, and support the expansion of school choice for American students and families.”

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America has always led the world in innovation and technology. It’s the ingenuity of the American people that has helped create the most prosperous nation in the history of the world.

That same ingenuity is what led to the rise of the sharing economy, which is changing the way we live, work, and connect.

The growth of the sharing economy may be relatively recent. But the idea behind it really isn’t a new concept. For quite some time, people have exchanged goods and services, or shared their skills, time, or resources for a fee.

Think about it. For decades, people have found ways to earn extra income through babysitting, renting property, dog walking, holding garage sales, cleaning homes, or mowing a neighbor’s lawn.

What’s taking place in the sharing economy isn’t much different. But the Internet has brought this type of economic activity to a whole new level, and it has empowered people from all sorts of backgrounds to put their entrepreneurial ideas into motion.

There is no question that this growing economic sector has improved the American quality of life. Consumers have more choices. People in need of transportation have more options. Families can easily rent out their home to help pay their mortgage. Individuals have a new way to sell their homemade goods and crafts.

The sharing economy has also helped start-up businesses get off the ground, and it has created new job opportunities that didn’t exist before.

Not everyone is looking for a 9-5 job. More and more people are increasingly drawn to flexible work arrangements, and that’s what attracts them to the sharing economy. They want to be their own boss, control their own schedule, or earn extra cash while pursuing an education.

The sharing economy has provided thousands of hardworking men and women the opportunity to do just that. Today, there are an estimated 3.2 million people working in the sharing economy. 79 percent are doing so on a part-time basis.

This is an industry that has really taken off. And as we have seen throughout our history, innovation often occurs and flourishes during challenging economic times, which is remarkable and should be celebrated. It’s a testament to the strength of our economy and the resilience of the American people.

As the sharing economy continues to grow, we need to make sure outdated federal policies don’t stand in the way. The self-employed individuals who rely on the sharing economy for work don’t fit neatly into obsolete job categories defined in another era. So, there are important questions over how we can modernize policies to meet the needs of the future.

There are also questions over how sharing economy workers can gain access to affordable health care and prepare for a secure retirement. Not every answer can or should come from Washington. Innovation outside of Washington is needed to help tackle these challenges. And I have no doubt that the same creative minds behind the sharing economy will rise to the occasion.

Earlier this year, a bipartisan group of committee members visited the San Francisco area to meet with leaders in the technology industry. We saw the operations of sharing economy companies firsthand. It’s my hope that today’s conversation will build off that experience, inform our future policy discussions, and help all of us better understand the realities of this emerging workforce.

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After decades of hard work, retirement should be a time to spend with family and grandchildren, explore new hobbies, and simply enjoy life.
 
But today, Americans across the country are having a hard time putting enough money aside for their retirement years.

It can be very challenging. Many individuals don’t even know where to begin, and so they turn to a trusted financial advisor to help them plan for the future.
 
Here in Washington, we need to do everything we can to empower more Americans to retire with the financial security they need. And we have a responsibility to ensure misguided federal policies don’t stand in the way.
 
That’s exactly why this committee has led the fight against the Obama administration’s flawed fiduciary rule for the past seven years.

Since the regulatory process began in 2010, we’ve repeatedly warned that the rule will lead to higher costs and fewer options for hardworking men and women as they save for retirement.

We’ve held numerous hearings over the years, sent countless oversight letters, urged the Obama administration to take a more reasonable approach, and passed a resolution of disapproval under the Congressional Review Act when they failed to listen.

Last year, we even advanced bipartisan legislation that would have achieved the Obama administration’s stated goal of enhancing protections for retirement savers. The main difference was that it didn’t restrict access to affordable retirement advice for low- and middle-income individuals.

It wasn’t just Republicans who raised concerns as the Obama administration crafted this fundamentally flawed rule. Let’s not forget that many of our concerns were echoed by congressional Democrats.

In a 2015 letter to former Secretary of Labor Perez, 100 House Democrats wrote that “it is vital that the proposal doesn’t limit consumer choice and access to advice, have a disproportionate impact on lower- and middle-income communities, or raise the costs of saving for retirement.”

Along those same lines, a group of Senate Democrats wrote that “it is important that any guidance enhance and not diminish savings opportunities for small businesses and moderate income families.”

These concerns expressed by Democrats are precisely why we continue to oppose the fiduciary rule.

Here we are today with a rule that’s completely unworkable and so complicated and burdensome that it will cause millions of Americans to lose access to their trusted financial advisors. According to the American Action Forum, the rule imposes $46 billion in costs on retirement savers.

Many small business owners — who are already struggling to offer retirement plans — may soon find they no longer have access to the critical advice they need to set up retirement plans for their employees.

Already, firms are beginning to drop the types of account options Americans with fewer savings often rely on.

A recent report found that 71 percent of financial advisors will stop providing advice to many savers with lower account balances in response to the rule. And it notes that up to seven million retirement savers could lose access to retirement advice altogether.

These are consequences the American people cannot afford. We all agree that financial advisors should act in good faith. But we can achieve that shared goal without hurting low- and middle-income families and employees of small businesses.

This issue should have always been addressed by Congress, not government bureaucrats. It’s an issue that impacts the retirement security of Americans across the country, and the people’s representatives should address it legislatively.

That’s why we are here today. It’s time to put an end to this convoluted regulatory scheme and advance meaningful solutions that will improve protections for retirement savers.

The Affordable Retirement Advice for Savers Act will overturn the fiduciary rule to ensure every American has access to the tools they need to save for retirement. It also amends federal law to require retirement advisors to act in the best interests of their clients. Again, legislation — not 1,000 pages of red tape — is the right way to do this.

I want to thank our colleague, Representative Roe, for championing this effort for years. Members of both parties have supported similar legislation in the past. It is my hope Republicans and Democrats can come together once again. The American people are depending on us to do just that.

For years, the Committee on Education and the Workforce has been fighting to preserve access to affordable retirement advice.

Since the Obama administration first proposed changes to the policies governing retirement advice, we’ve led oversight efforts here in Congress.

As the former chairman of the subcommittee on Health, Employment, Labor, and Pensions, I presided over a number of hearings where we heard firsthand how this new rule will jeopardize small business retirement plans, make it harder for low- and middle-income individuals to save for retirement, and restrict basic services, such as assistance in rolling over funds from a 401(k).

Although this misguided rule has already taken effect, our fight continues on behalf of hardworking men and women in my home state of Tennessee and across the country.

To be clear, we completely agree that Americans deserve retirement advice that’s in their best interest. That’s what we’ve been saying all along.

But a rule requiring so-called “sound retirement advice” achieves nothing if it means many people will no longer have access to retirement advice at all. According to one estimate, seven million retirement savers may lose access to advice altogether because of the fiduciary rule.

We are just beginning to see the real-world consequences of this rule take shape. Firms are starting to eliminate more affordable retirement account options in favor of fee-based plans that are out of reach for many families with lower incomes.

We don’t have to accept these consequences. We can pass legislation to fix the fiduciary mess while enhancing protections for retirement savers at the same time.

The proposal before us today will do just that. The Affordable Retirement Advice for Savers Act does not simply repeal the Obama administration’s fiduciary rule; it amends the Employee Retirement Income Security Act and the Internal Revenue Code to establish a statutory definition of “investment advice.”

Unlike the confusing, complicated and unworkable fiduciary rule, this clear standard would require retirement advisors to act in the best interests of their clients without causing millions of Americans to lose access to their trusted financial advisor, and without limiting the ability of small businesses to help their employees save for retirement.

In other words, this proposal achieves the Obama administration’s alleged goal of holding financial advisors accountable without undermining the retirement security of working families.

When the American people face a harmful rule that will have such a far-reaching, negative impact, we have a responsibility to do everything we can to stop it. We cannot stand idly by as a new rule threatens to weaken our nation’s retirement security at a time when so many families are struggling to save and invest.  In 2015, the GAO found that 29 percent of Americans 55 and older have no retirement savings and no traditional pension. In fact, today, nearly 40 million working families haven’t saved a dime for retirement.

I hope members of both parties will do the right thing and support the Affordable Retirement Advice for Savers so we can strengthen retirement protections and empower more Americans to plan for the future they want.

ESSA can be considered a milestone for K-12 policy because it was a monumental shift in  the role states and school districts would have in the future of education.

ESSA sought to achieve two specific goals for K-12 education: autonomy and accountability.

States and school districts were given new independence when creating a K-12 education program that works best for their own students, ending a “Washington knows best” approach to education.

Additionally, ESSA specifically prohibited the federal government from influencing states’ adoption of particular standards. It also repealed federal mandates for teacher performance and protected a state’s right to opt-out of federal education programs.

Part of ESSA’s goal for state and school district autonomy was to force Washington to remain at arm’s length from states and school districts when it comes to education, and rest assured that this committee will be watching to ensure Washington keeps its distance.

While states and school districts were given more autonomy in ESSA, the law maintains provisions ensuring parents have transparent information about school performance and states and districts can hold schools accountable for delivering a high-quality education to all students.

ESSA also included unprecedented restrictions on the Department of Education’s authority to take back the state and local flexibility guaranteed by the law.

ESSA has stripped away powers of the Department of Education, such as the ability of the Secretary of Education to legislate through executive fiat, or the ability of the Department’s bureaucrats to substitute their judgment for states’.

History made it clear that a top down approach to K-12 education did not serve students, teachers, parents, or the states well, and ESSA directly addressed those shortcomings.

Given the monumental shift in education policy represented by ESSA, it is important that we hear how implementation is progressing. We know the law will not fully take effect until the coming school year, and we will need time to assess its impact on schools and students. However, I look forward to hearing from today’s witnesses about the progress states, school districts, and the Department of Education are making.

This committee has been keeping a close eye on this implementation process. Last year, we held four hearings on implementation of ESSA. Today, we will continue our discussion on ESSA’s implementation.

ESSA was truly a change for K-12 education, and I do believe this bipartisan law delivers the proper balance of autonomy and accountability to parents and taxpayers, while ensuring a limited federal role.

This law has the ability to empower state and local leaders to change K-12 education for the better, and that is why it is of utmost importance to this committee.

By Chairwoman Virginia Foxx

Far too often in Washington, D.C., when you have a hammer, everything looks like a nail. That certainly seemed to be the mindset of government bureaucrats during the Obama administration.

In an attempt to solve a problem that didn’t exist, bureaucrats who have never owned a business or made a payroll distorted the definition of what it means to be an employer. It began with the National Labor Relations Board’s 2015 ruling in the Browning-Ferris Industries case, which dramatically expanded the joint employer standard. Then, the Obama administration took this radical policy a step further.

Read the full op-ed published by The Hill here.

By CityBusiness Staff

Congressional lawmakers looking at the impact of an Obama-era labor policy heard Tuesday from a New Orleans-based business concerned that it could derail plans to expand in the Gulf South.

Dat Dog, the gourmet hot dog joint that opened on Freret Street in 2011, was one of several businesses asking the House Committee on Education and the Workforce for clarification on joint employer policy.

Courtesy datdog.com

Under the Obama administration, the Labor Department significantly broadened the definition of a joint employer, and the National Labor Relations Board said a company could be considered a joint employer even if it had only indirect or unexercised control.

In previous years, the NLRB had said a company had to have direct control over the actions of a subcontractor or franchisee’s employees in order to be considered a joint employer.

Jerry Reese, who handles franchise development for Dat Dog, said the new standard could hurt plans to expand in Louisiana and beyond. The restaurant has put new restaurants in Lafayette and Hattiesburg, Mississippi and announced this year it is looking for franchisees in the Gulf South.

“Implementing our expansion plan will certainly depend on Congress’s willingness to help address regulatory obstacles that make the future growth of small businesses, like ours, uncertain,” Reese said. “As with any business that is fortunate enough to grow, we now face new risks. Joint employer is the most prominent risk on our minds.”

“Make no mistake about it: this policy disproportionately affects small businesses,” he added. “Big corporations have the resources, the attorneys and the economies of scale to adapt to joint employer … It’s the small employers like Dat Dog that may run out of resources before we even get started.”

U.S. Rep. Virginia Foxx, R-North Carolina, who chairs the committee, said it supports rolling back the joint employer policy to what it was in previous years.

 

A child’s early development lays critical groundwork for he or she to succeed in the future.

While a parent is the ultimate decider of what is best for their own child’s early development, the federal government has had a role in childcare for over 50 years.

With enactment of the Head Start Act in 1965, a by-product of President Lyndon Johnson’s War on Poverty, the federal government established its role helping promote healthy development of vulnerable children in their earliest—and arguably—most important years.

While Head Start provided greater access to early childhood education for vulnerable families, like many Johnson-era programs, the federal government’s involvement in this space has mushroomed into an overly-burdensome, costly, and confusing network of programs.

Today, GAO will testify on their new report which finds the federal government provides support for early childhood services through 44 separate programs, nine of which have an explicit purpose to do so at an annual cost of more than $15 billion. The two largest are the Head Start and the Child Care and Development Block Grant programs. We will hear that the agencies have done a better job at improving their communications in operating these programs, but that overlap, duplication, and fragmentation among programs remain.

Finding an early childcare or education program is an important decision for many working parents and families. The federal government should not be making the job of navigating the system more difficult through a confusing maze of federal programs.

Luckily for parents, states have stepped up to the plate. Recently, we have seen states take the lead in operating early childhood programs, as well as increase funding for this area. For example, my home state of Indiana has launched a promising new pilot program aimed at helping low-income Hoosier children access a free, high-quality pre-k education.

In 2016 alone, states increased funding by a combined $480 million in early childhood education programs. This is an increase of 6.8 percent from the previous year.

We will hear today examples of how states are finding a better way for children, and are helping small businesses innovate to improve their services.
States have recognized that they are better positioned to help parents when it comes to choosing the services that are best for their child.

For those of us who want to see the federal government take a diminished role in deciding what is best for our children in terms of education, this is excellent news.

States understand their local communities best, and understand what works and does not work for the children and parents within the state.

Today, we will hear about the positive impacts of state centered early childhood programs.

Additionally, we will hear testimony on just how large and cumbersome federal involvement has become. I hope this conversation will help us consider how we might address the redundancies and inefficiencies throughout these programs.

Early childhood development is a critical issue because we are talking about future students, future citizens, and future leaders in the workforce. At the same time, we have a responsibility to re-evaluate the current climate and make sure that taxpayer investments are being used effectively. I look forward to a discussion about the ways we can better meet the needs of American children, families, and taxpayers alike.

Over the past few years, we have only begun to comprehend the horrors of human trafficking and how it established a foothold in this country. Thanks to the vigilance of faith-based groups, humanitarians across the globe, and the courage of survivors, we are learning more about the tactics and loopholes human traffickers exploit to prey on the most vulnerable among us.

Children are often the ones most vulnerable to exploitation. It’s estimated that one in six endangered runaways are likely victims of this horrific crime. Earlier this year, with the leadership of Representatives Guthrie and Courtney, the House passed the Improving Support for Missing and Exploited Children Act.

That bipartisan legislation supports the critical efforts of the National Center for Missing and Exploited Children. It includes positive reforms to encourage new and innovative ways to recover and protect missing and exploited children, including those who are victims of trafficking. We need to do everything possible to ensure this positive work can continue, and that’s what H.R. 1808 was all about.

But this is an issue that demands our ongoing attention. More solutions are needed. And that’s why we’re here today — to build on the bipartisan work we’ve already accomplished.

The Department of Labor has a unique vantage point for spotting violations in workplaces that can be tell-tale signs of modern slavery and labor exploitation. This bill equips DOL personnel to form partnerships with law enforcement to detect and address signs of human trafficking in America’s workplaces.

If we can shed light in any corner where this evil may lurk, we must.

I commend Mr. Walberg’s leadership on this issue, and Mr. Sablan for working with him so passionately. I am proud that the Committee on Education and the Workforce could do its part to support their work and bring this bill to the floor.

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Small businesses are the driving force behind the American economy. They employ millions of Americans, bring communities together, and provide services we rely on each and every day.

So many individuals have achieved the American Dream by owning a small business. One of the reasons we’re the greatest, most prosperous nation in the history of the world is because of the opportunity for people to take a risk, start a small business, and achieve a lifetime of success.

As a former small business owner, I understand the many challenges small companies face. It can be very difficult — and costly — for small businesses to get up and running. And once they do, they constantly face tough decisions as they try to hire workers, make a payroll, and keep their doors open.

Through hard work and determination, many entrepreneurs have found their path to success through franchising, which often involves lower start-up costs. Opportunities through franchising, as well as contracting, have empowered countless Americans to climb the economic ladder and obtain a better quality of life for their families. Today, there are 733,000 franchise establishments nationwide that support more than 7.6 million jobs.

The entrepreneurial spirit of small businesses, when combined with the resources, infrastructure, and potential of America’s most notable brands, has brought untold innovation and horsepower to the American economy and desperately-needed jobs to communities across this country.

Sadly, unelected bureaucrats who have never owned a business or made a payroll launched an unprecedented attack on these successful business models that so many rely on. It began when the National Labor Relations Board issued an extreme joint employer decision, which distorted the definition of what it means to be an employer. Then, the Obama administration took this radical new policy a step further, spreading it to other areas of federal labor law.

The previous joint employer standard made sense. For two or more employers to be considered joint employers, they had to share direct control over the terms and conditions of employment, including hiring decisions, for example. This clear, straight-forward test provided stability and certainty for job creators for decades.

But now, local employers face a complicated, confusing, and vague new standard that has threatened their independence and created an enormous amount of uncertainty. Two completely separate employers can be considered joint employers simply because they made a business agreement that “indirectly” or “potentially” impacts their employees’ day-to-day responsibilities and working environment.

For small franchisees, it means they could lose control over their business to larger companies. We’ve heard from many small business owners over the years who are concerned they could lose everything they’ve worked hard to build for themselves and their families.

One Florida small business owner once warned this committee, “Instead of being a small businessman, I would virtually overnight become a manager for a large company … I now find myself in the position that an unelected board in Washington, DC can just unilaterally determine that my American Dream is over.”

Who could possibly gain from this attack on the American Dream? We know it won’t be America’s workers. According to the American Action Forum, the joint employer scheme could result in 1.7 million fewer jobs.

Powerful special interest groups are the ones who stand to benefit. Desperate to reverse decades of decline in union membership, union bosses now have a new tool that makes it easier to unionize. For years, they’ve been trying to unionize multiple small businesses together in one organizing drive, and the joint employer scheme helps them do just that.

It’s time to put an end to this extreme and partisan policy that does nothing to help American workers and makes it harder for entrepreneurs to pursue their dreams. This committee has previously advanced legislation to protect small businesses and their employees by restoring the commonsense definition of what it means to be an employer. With a new Congress and new administration, we have an opportunity to get the job done.

Already, the Trump administration has taken steps to provide regulatory certainty where they can. And it is my hope that hearing firsthand accounts today of the job-crushing impact of the expanded joint employer standard will build new momentum here in Congress to find the solution Americans need.


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House Republicans have been working hard to remove barriers to job creation, deliver regulatory relief, and help working families and small businesses succeed.

Rolling back the National Labor Relations Board’s activist agenda is an important part of that effort. During the Obama administration, the board advanced policies designed to empower special interests at the expense of the men and women who keep our economy moving. These policies not only hampered our economic recovery and limited opportunity, they stripped away rights and protections for workers and employers.

As a former union member, I respect the right of workers to join a union. I also respect the right of workers to have a real choice and make an informed decision in the matter. That’s why the NLRB’s ambush election rule is so concerning. Simply put, this rule was designed to rush employees into union elections before they have an opportunity to consider all the consequences.

Workers now have as little as 11 days to understand the pros and cons of joining a union before casting their vote. And while unions can prepare their entire campaign before a business even knows about it, employers have as few as seven days to find legal counsel and appear before a NLRB hearing officer.

This short time period is completely unreasonable. Eleven days isn’t enough time for workers to hear from both sides of the debate and make a personal decision that impacts their job and paycheck. And seven days certainly isn’t enough time for employers to respond and communicate with their employees. This is especially true for a small business owner who lacks HR staff or in-house counsel.

Before this rule took effect, the union election process took a median of 38 days. This is a more sensible time frame that gives workers a chance to gather information and get the facts. We need to get back to the way things were before the NLRB overstepped. And in no way would union leaders stand at a disadvantage. In fact, before this unnecessary rule was implemented, unions won 67 percent of workplace elections.

H.R. 2776 will restore long-standing NLRB election procedures that served workers well and provided a level playing field between unions and employers. The bill ensures no union election is held less than 35 calendar days from when the petition for the election was filed.

But there’s more that must be done to restore fairness to union elections, which is why this bill also addresses the NLRB’s micro-union scheme. The board’s decision in the 2011 Specialty Healthcare case was perhaps one of the most reckless of the past eight years. It empowered union leaders to handpick individual employees and form micro-unions as an incremental step toward organizing an entire business. As a result, employees face fragmented workplaces and employers are forced to confront union red tape that drives up the cost of doing business and hiring workers.

At a recent hearing, a Michigan Health and Hospital Association official from my home state said, “This sub-divided situation is terrible for any employer, but it is a matter of life or death in a health care setting. The success of any hospital is dependent on the ability of its staff members to work as a cohesive unit. The Specialty decision threatens this vital component.”

Her comments serve as a painful reminder of how misguided federal policies can have harmful, real-world consequences. Congress must take action. The Workforce Democracy and Fairness Act will roll back the NLRB’s micro-union scheme and reinstate important protections workers and employers received for decades.

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