Federal Legislation
House Advances Save Local Business Act
December 30, 2025
The House of Representatives has advanced the Save Local Business Act (H.R. 4366), which amends the National Labor Relations Act and the Fair Labor Standards Act to clarify the joint employer standard. This legislation requires that each employer must directly, actually, and immediately exercise significant control over essential employment terms to be considered a joint employer. The act aims to limit joint employer liability, particularly benefiting small businesses and franchisees by providing clearer and more restrictive criteria for joint employer status. This change impacts labor law enforcement and employer responsibilities, potentially reducing indirect liability for companies using subcontractors or temporary staffing agencies.
- Why this matters: Procurement professionals should assess how this legislation affects contract labor arrangements and subcontractor management, as it may reduce joint employer risks.
- The clarified standard may influence contract terms and compliance requirements related to labor practices and liability.
- Businesses engaged in government contracting should evaluate their workforce structures to align with the updated joint employer criteria.
- Legal and compliance teams must update policies to reflect the new standard, potentially affecting labor relations and union negotiations.
An employer may be considered a joint employer of the employees of another employer only if each employer directly, actually, and immediately, exercises significant control over the essential terms and conditions of employment of the employees of the other employer.
— Save Local Business Act
A joint employer may be held liable for unfair labor practices committed by an unrelated company, even where the first had no control over the actions of the second leading to the ULP.
— Matthew Haller
The bill would empower companies that effectively hire workers through subcontractors or temporary employment agencies to escape accountability for child labor and wage theft and would restrict unionized workers' ability to collectively bargain over the full range of the terms and conditions of employment in their workplaces.
— Minority Views
Agencies
House of Representatives, House Committee on Education and Workforce, National Labor Relations Board, Department of Labor, Subcommittee on Health, Employment, Labor, and Pensions
Vendors
CKE Restaurants Holdings, Inc., Jones Day, McKenna Long & Aldridge
Locations
Sources
- H. Rept. 119-422 - SAVE LOCAL BUSINESS ACT · congress · Dec 30
- H. Rept. 119-422 - SAVE LOCAL BUSINESS ACT · congress · Dec 30