Save Local Business Act
- Bill Number
- H.R. 4366
- Origin Chamber
- House
- Congress
- 119th Congress, Session 1
- Policy Area
- Labor and Employment
- Status
- Introduced
- Latest Action
- 2026-01-13: Rule H. Res. 988 passed House.
- Last Updated
- 2026-06-11T23:26:40Z
AI-Generated Summary
Purpose of the Legislation
The "Save Local Business Act" (H.R. 4366) aims to clarify and narrow the definition of "joint employer" under two key federal labor laws: the National Labor Relations Act (NLRA), which protects workers' rights to organize and bargain collectively, and the Fair Labor Standards Act (FLSA) of 1938, which sets standards for minimum wage, overtime pay, and child labor. The goal is to ensure that only employers with direct and significant control over workers' employment terms are held jointly responsible, preventing broader or indirect liability.
Key Provisions
- Amendment to the NLRA (Section 2(2)): Redefines "employer" to specify that an employer is a joint employer of another company's employees only if it directly, actually, and immediately exercises significant control over essential employment terms. These terms include:
- Hiring or firing employees.
- Determining pay rates and benefits.
- Day-to-day supervision.
- Assigning work schedules, positions, or tasks.
- Disciplining employees.
- Amendment to the FLSA (Section 3(d)): Applies a similar standard for joint employer status, directly referencing the NLRA's new criteria. However, it uses the FLSA's own definitions of "employee" and "employer" (e.g., broader coverage of workers in commerce) to determine applicability under wage and hour rules.
Significant Changes to Existing Law
- Prior interpretations by agencies like the National Labor Relations Board (NLRB, which enforces the NLRA) and the Department of Labor (DOL, which enforces the FLSA) had sometimes treated entities as joint employers based on indirect influence, such as through contracts or branding guidelines (e.g., franchisors over franchisees).
- This bill introduces a stricter, multi-factor test requiring direct and immediate control, overriding broader agency rules. It limits joint liability to cases of hands-on involvement, potentially reversing recent expansions of the joint employer concept.
Potential Impacts
- On Government Agencies: The NLRB and DOL may see reduced enforcement cases and investigations into joint employer arrangements, as the law sets a higher bar for proving shared responsibility. This could streamline agency resources but limit their ability to address complex business relationships.
- On Citizens (Workers and Businesses): Small and local businesses (e.g., franchises or contractors) may face less risk of being held liable for another entity's labor violations, potentially lowering costs and legal burdens. Workers could find it harder to pursue claims against larger parent companies or brands, affecting access to remedies for wage theft, unfair labor practices, or union rights.
- On International Relations: No direct impacts, as the bill focuses on domestic labor standards without addressing cross-border employment.
Main Stakeholders Affected
- Businesses: Particularly small businesses, franchises, staffing agencies, and subcontractors that collaborate with larger entities; they benefit from clearer boundaries on liability.
- Employees and Labor Unions: Workers in shared employment setups (e.g., temporary or gig workers) and unions may have fewer options to hold multiple employers accountable, potentially weakening collective bargaining or wage protections.
- Government Agencies: NLRB and DOL, as enforcers of the amended laws, will need to adjust regulations and case handling to align with the new standards.
- Trade Associations: Groups representing employers (e.g., franchisors) support this, while labor organizations (e.g., unions) likely oppose it due to reduced leverage.
Notable Legal, Constitutional, or Political Implications
- Legal Implications: Narrows the scope of joint employer liability, which could lead to more litigation challenging agency interpretations but provides statutory clarity to reduce uncertainty in business contracts. It harmonizes standards between the NLRA and FLSA while respecting each law's unique definitions.
- Constitutional Implications: None directly addressed; the bill operates within Congress's authority under the Commerce Clause to regulate labor in interstate commerce, without raising free speech, due process, or other constitutional concerns.
- Political Implications: Positions as a pro-business reform by limiting regulatory overreach, potentially influencing future labor policy debates on worker protections versus economic flexibility. The bill's progression (introduced July 2025, reported December 2025) reflects bipartisan sponsorship but aligns with efforts to support local enterprises amid evolving gig and franchise economies.
This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.
Sponsor
Cosponsors (2)
Rep. Hern, Kevin [R-OK-1], Rep. Onder, Robert F. [R-MO-3]
Recent Actions
- 2026-01-13: Rule H. Res. 988 passed House.
- 2026-01-12: Rules Committee Resolution H. Res. 988 Reported to House. Rule provides for consideration of H.R. 2988, H.R. 2262, H.R. 2270, H.R. 2312 and H.R. 4366. The resolution provides for consideration of H.R. 2988 under a structured rule, and H.R. 2262, H.R. 2270, H.R. 2312, and H.R. 4366 under a closed rule. The rule provides for one hour of general debate and one motion to recommit on each bill.
- 2025-12-30: Placed on the Union Calendar, Calendar No. 368.
- 2025-12-30: Reported (Amended) by the Committee on Education and Workforce. H. Rept. 119-422.
- 2025-12-30: Reported (Amended) by the Committee on Education and Workforce. H. Rept. 119-422.
- 2025-07-23: Ordered to be Reported in the Nature of a Substitute by the Yeas and Nays: 20 - 16.
- 2025-07-23: Committee Consideration and Mark-up Session Held
- 2025-07-14: Referred to the House Committee on Education and Workforce.
- 2025-07-14: Introduced in House
- 2025-07-14: Introduced in House
Bill Versions
- Save Local Business Act — issued 2025-07-14 — PDF (3 pages)
- Save Local Business Act — issued 2025-12-30 — PDF (6 pages)