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Business groups raise alarm Biden nominee would threaten independent contractors

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Business groups raise alarm Biden nominee would threaten independent contractors

July 14, 04:27 PM July 14, 04:27 PM

Several business groups are calling on the Senate to oppose President Joe Biden’s nominee to lead a key division of the Labor Department, arguing that he could take a wrecking ball to small businesses.

David Weil, who is dean of the Heller School for Social Policy and Management at Brandeis University, will face a Senate hearing on Thursday and will field questions about his previous tenure leading the Wage and Hour Division in the Obama administration — the same role that Biden has nominated him for.

A coalition of business and industry groups sent a letter to Senate Health, Education, Labor, and Pensions Committee Chairwoman Patty Murray of Washington and ranking member Richard Burr of North Carolina expressing concerns about the nomination. Among the signatories were the International Franchise Association, the National Restaurant Association, the National Association of Home Builders, and a dozen other groups.

“Based on his previous service at DOL, and his track record of bias against employers, particularly the smallest employers in America, we are concerned that Dr. Weil would implement policies at the DOL that are unbalanced and would harm workers and small businesses, in particular women and minority-owned businesses that employ millions of Americans,” they wrote.

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While leading the Wage and Hour Division, Weil, who served in the Obama administration from 2014 to 2017, issued an administrator’s interpretation under the Fair Labor Standards Act that worked to apply stricter standards to the “independent contractor” classification. The groups said that the direction squares with the Protecting the Right to Organize Act, a pro-union bill that Republicans and many business groups vociferously oppose.

The signatories also addressed Weil’s move to expand liability for joint employers under the FLSA by broadening the definition of “joint-employer” to include employers that exercise only indirect control of employees. They contend that between 2016 and 2018, Weil’s directive cost franchise businesses more than $33 billion per year in legal and operational costs that resulted in 376,000 lost job opportunities before it was withdrawn by the Trump administration.

The letter also addresses a 2016 white-collar overtime rule that would have extended mandatory overtime pay for some 4.2 million workers, although a federal judge blocked the move and concluded the Labor Department overstepped its rulemaking authority.

Michael Layman, vice president of federal government relations with the International Franchise Association, told the Washington Examiner that Weil is an “anti-small business ideologue” and said that there has been a huge amount of opposition from small businesses to his nomination.

He said during a Wednesday interview that Weil will likely advance positions similar to when he was previously at the Labor Department if confirmed to the new role.

“He did those three things when he was in office before, and each of those three actions were struck down by other wings of government, so we don’t need to rerun the David Weil movie again,” Layman remarked.

Layman said that incentives in franchising are diminished if franchiser brands “are increasingly made liable for no good reason for the day-to-day activities of their franchisees, who are separate and independent businesses.” Franchising provides people job advancement and business-ownership opportunities, including for entrepreneurs to grow their businesses, he said.

Layman contends that Weil doesn’t like franchising and other business models and wondered why any senator who supports those models would stick their neck out to support his nomination “over the interests of their constituents.”

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The U.S. Chamber of Commerce, the world’s largest business association, also wrote a letter to the committee expressing its trepidation about Weil’s nomination based on his tenure with the Obama administration.

The Washington Examiner reached out to Weil for comment about the concerns raised by the business organizations but did not immediately receive a response.

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