Save Local Business Act
Introduced July 14, 2025 · Last action January 13, 2026
Plain English Summary
This bill makes it harder for federal agencies and courts to hold two or more companies jointly responsible for an employee's wages, benefits, and working conditions. The bill requires that for multiple employers to be treated as "joint employers," each employer must directly and immediately exercise significant control over essential employment terms like hiring, pay, discipline, and scheduling. This raises the bar from current legal standards that are more flexible about what constitutes joint employer relationships.
Who benefits
Staffing agencies, franchisors (like McDonald's, Subway), subcontractors, and labor brokers who contract with or supply workers to larger companies. Companies that use subcontracting, franchising models, or labor intermediaries to distance themselves from direct employment relationships. Employers seeking to avoid collective bargaining obligations and joint liability for wages and benefits.
Who pays / loses
Workers in franchised businesses, temporary and staffing-agency employees, subcontracted workers, and gig-economy workers who lose ability to hold multiple responsible parties liable for wage violations or unsafe conditions. Unions lose leverage to enforce collective bargaining across supply chains and franchise networks. Workers lose potential remedies when intermediary employers lack sufficient assets to pay damages.
Funding & Lobbying Interests
Industries with significant financial stakes include: staffing and temporary employment agencies (which profit from labor intermediation), franchise systems (especially food service and retail franchisors), subcontracting networks, and outsourcing firms. Business groups backing joint employer restrictions typically include the National Retail Federation, American Staffing Association, International Franchise Association, and Chamber of Commerce. Labor unions and worker advocacy organizations oppose such bills.
Political Impact
Affected Groups
Approximately 5-10 million workers employed through staffing agencies, franchisees, and subcontractors in the United States (based on Bureau of Labor Statistics data on alternative work arrangements). Franchisees and small business operators in franchise systems. Wage and hour enforcement capacity is reduced for lower-wage workers in construction, hospitality, retail, and cleaning services where subcontracting and staffing agencies are prevalent. Rural and urban workers in industries with high use of labor brokers face reduced wage protections.
Political Subtext
Proponents argue this bill protects small franchisees and local businesses from being held liable for decisions made by corporate franchisors or parent companies, preventing frivolous joint employer claims that could burden small operators. Critics argue the bill shields large corporations and franchisors from responsibility for labor law violations committed by their supply-chain partners and shields them from collective bargaining obligations. They contend the bill guts the Department of Labor's 2024 joint employment rule and pre-2024 standards that held lead companies accountable when they exercised indirect or economic control over working conditions. Non-partisan analysis from the Economic Policy Institute and union research shows joint employer liability is essential for enforcing wage and hour laws in fragmented supply chains, particularly in franchising and staffing models where lead companies exercise substantial operational control without legal responsibility.
Real-World Stakes
If passed, this bill would overturn the Biden Administration's 2024 joint employer final rule issued by the Department of Labor, which codified broader joint employer liability (an employer can be liable even without direct, immediate control if it exercises substantial operational control). The bill returns to standards closer to the Trump Administration's 2020 rule. In states that have adopted stricter joint employer standards (California, New York), federal law would no longer backstop state enforcement. Franchisees in systems like McDonald's or Subway would face lower risk of liability for franchise-wide labor violations, but workers would have fewer defendants from whom to recover unpaid wages. Research on franchise wage theft shows that when lead companies are not jointly liable, recovery rates for workers drop significantly because franchisees often have insufficient assets. Application to the Fair Labor Standards Act means workers cannot aggregate hours across multiple related employers to reach overtime thresholds, reducing overtime compensation in staffing and subcontracting arrangements.
Sponsor
Sponsor information not available.
Vote Record
No recorded votes.
Campaign Finance — Primary Sponsor
No campaign finance data available yet.
501(c)(4) disclosure: Contributions from 501(c)(4) "dark money" organizations are not required to be publicly disclosed and are not reflected in the figures above. Data sourced from FEC public disclosure filings.
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