Hearings on Small Biz Tax & Regs

July 12, 2017

This week, two House committees will hold hearings examining issues of critical importance to America’s small businesses. On Wednesday, July 12, the House Committee on Education and the Workforce will discuss the expanded definition of joint employer under federal labor laws and how it could hamper entrepreneurship. Then on Thursday, the Ways and Means Tax Policy Subcommittee will discuss how tax reform could ease small-business ownership.


House Committee on Education and the Workforce

On Wednesday, July 12, 2017, at 10:15 a.m., the House Committee on Education and the Workforce will hold a full committee hearing entitled, “Redefining Joint Employer Standards: Barriers to Job Creation and Entrepreneurship.” Members will examine the growing threat to small businesses posed by the expanded definition of joint employer under federal labor laws.

Republicans are drafting legislation that would reverse the National Labor Relations Board’s (NLRB’s) 2015 Browning-Ferris decision, which made it easier to hold large companies liable for violations by franchisees and contractors. The bill is said to be introduced before Congress leaves for August recess.

In 2015, the NLRB issued Browning-Ferris Industries of California, Inc. (BFI). The decision overruled more than thirty years of bipartisan precedent. The Board replaced the predictable and clear “direct and immediate control” standard for determining joint employer status with a vague test based on “indirect” and “potential” control over workers’ terms and conditions of employment. The NLRB’s expanded definition of joint employer spread from the NLRB to other agencies. Last year, the Occupational Safety and Health Administration and the Wage and Hour Division at the U.S. Department of Labor released administrative directives expanding joint employer liability. The Equal Employment Opportunity Commission also filed a brief in support of the NLRB’s new standard in the federal court appeal of BFI.

The decision exposed a broad range of businesses, from contractors and subcontractors, to franchisors and franchisees, to workplace liability for another employer’s actions and for workers they do not employ. In addition, franchise businesses face more operational and legal costs, decreased business values, less compliance assistance from franchisors, less growth and fewer jobs.

Upon announcement of the hearing, Chairwoman Virginia Foxx (R-N.C.) stated: “….It is my hope that hearing firsthand accounts of the damage caused by the NLRB’s overreaching decision will bring this issue the attention it deserves, and that it will bring all of us closer to finding a solution for it.”

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House Committee on Ways and Means

House Committee on Ways and Means Tax Policy Subcommittee Chairman Peter J. Roskam (R-Ill.) recently announced that the Subcommittee will hold a hearing on how tax reform will enhance the contribution that small businesses make to the growth of the American economy and the creation of jobs for American workers. The hearing will take place on Thursday, July 13, 2017 in 1100 Longworth House Office Building, beginning at 10:00 a.m.

As Republican taxwriters and congressional leaders continue to huddle with Trump administration officials to craft a joint proposal that they can move through Congress in the fall, House Ways and Means Committee Chairman Kevin Brady (Texas) recently made the announcement of two upcoming hearings in July on tax reform. This first one, will address the benefits of tax reform for small businesses and the next one—yet to be scheduled—will focus on the need for tax code simplification for individuals and families.

So far this year, the full committee has held two hearings on issues in tax reform: one examining the controversial Republican proposal for a border-adjustment business tax and one that broadly considered the need for reform. These come after several years of Ways and Means hearings and working groups to build momentum and develop proposals for comprehensive tax reform.

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