contractor work site

The federal labor board will be making a ruling in the next few weeks that could redefine it means to be an employer in the U.S. The outcome of the Browning-Ferris Case has the potential to hold businesses responsible for working conditions and policies of contractors and subcontractors, including temporary workers.

According to Bloomberg News, the outcome could be historic and cause ripples throughout the business world:

The decision, following an earlier conclusion by the labor board’s general counsel that McDonald’s Corp. (MCD) can be held responsible for working conditions along with individual restaurant owners, could amount to an “existential” threat to the franchise business model, said Matthew Haller, a spokesman for the International Franchise Association in Washington.

“This is a modification of what it means to be an employer in America,” he said. The association is preparing a public relations campaign and urging Congress to get involved.

At issue is who qualifies as a “joint employer” under U.S. labor law, a definition that could have broad impacts. The prospect of a shift has already prompted an outcry from businesses that say it could raise costs and slow a growing sector of the economy.

Yes, businesses are basically threatening to stop “not hiring” workers — i.e. cease outsourcing jobs to temp agencies or companies with low-paid sub-sub-contractors if they’re forced to think about the ethics or hiring practices of the company they’re handing their money to. Of course, the original reason that many companies outsource work is because they don’t want to be responsible for health benefits and other amenities that full-time, direct hires often enjoy. Outsourcing also often protects business from being in the line of fire for lawsuits resulting from personnel issues.

Maybe they’ll start doing the direct hiring thing again if that’s what it comes down to?

Or will they just get it over with and send all the viable jobs to outsourcing farms overseas?