How to Protect Small Businesses From Bureaucratic Overreach

Countless Americans see the United States as the land of opportunity. This belief is vividly demonstrated through the relentless pursuit of the American dream. According to the Small Business Administration, there are over 30 million small businesses across America.

For each one of the individuals behind these businesses, opportunity is not just an ideal, it is a reality. Small business owners sacrifice their time, savings, sweat, and tears for the chance at providing meaningful services and jobs for their communities, all while pursuing their own American dream.

For a small business, customers and employees are more often viewed as an extension of family and community. Yet, for the last decade, Democrats in Washington, D.C., and unelected bureaucrats—people who have never started a business or created a job in their communities—have worked to advance costly, burdensome regulations, pretending that they know what is best for small businesses and their employees.

Among the most egregious examples of this “bureaucrat knows best” mindset is the Obama-Biden joint employer rule.

For over 30 years, the National Labor Relations Board had a clear definition of what qualified as a joint employer, requiring that two entities have direct and immediate shared essential terms and conditions of employment, such as hiring, firing, and supervision.

In 2015, the NLRB threw away this longstanding definition and created a new, vague definition of what qualifies as a joint employer. This created uncertainty for millions of small business owners and their employees.

The Obama administration seized upon the opportunity in January 2016, when the Department of Labor Wage and Hour Division issued a new de facto regulation through administrative interpretation claiming, “The concept of joint employment, like employment generally, should be defined expansively under the [Fair Labor Standards Act (FLSA)].”

Under the Trump administration in 2020, the NLRB restored certainty for small businesses by reviving the previous, longstanding “joint employer” definition. Just three years later during the Biden administration, the NLRB reversed course again, reinstating the vague and expansive Obama-era joint employer standard.

The Obama-Biden joint employer standard remains vague and is intended to apply to as many businesses as possible. This puts countless small businesses at risk for increased regulation and liability. More broadly, the structure of a successful business and its owner-employee interactions could be disrupted by the subjective interpretations of unelected bureaucrats.

That is why this week, the House Education and Labor Committee is marking up the Save Local Business Act, introduced by Rep. James Comer, R-Ky.

This legislation would roll back the Obama-Biden job-killing joint employer standard and restore the standard that served millions of small businesses well for over 30 years. Perhaps more importantly, the Save Local Businesses Act would provide regulatory certainty and end the regulatory back-and-forth fueled by previous Democrat administrations through the NLRB.

Under the Constitution, unelected bureaucrats do not have the power to make laws. Only Congress can do that.

America’s small business owners and their employees deserve a fair and stable playing field if this country wants to remain the land of opportunity. That is why the House Education and Workforce Committee must advance the Save Local Businesses Act.

The opportunity that exists in America remains a reality for millions of small business owners—let’s make sure generations to come have the same opportunity to find their American dream.

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