Labor Pains: Because Being in a Union can be Painful

EFCA’s Disastrous Impact on Small Businesses: 1.8 million affected under EFCA

There is a rumor floating around Washington that the deceptively-named Employee Free Choice Act won’t affect small businesses.

In a recent OpEd in the Herald News titled “Free Choice and Small Business,” Sen. John Kerry wrote:

Employee Free Choice Act makes no changes to the small business exemptions under our nation’s labor laws. Small businesses employing an estimated four million American workers would still be exempt and completely unaffected.

It is true that EFCA makes no changes to the National Labor Relations Board’s Jurisdictional Standards, but the problem is that those standards haven’t been updated since 1959! And currently any non-retail business with revenues (not profits) over $50,000 from interstate operations is eligible for unionization. Retail businesses must top $500,000. Here are the NLRB’s “current” standards:

Jurisdiction will be asserted over any retail operations with a gross volume of business in excess of $500,000 annually and which has some business, greater than de minimis, across State lines. The nonretail standard requires $50,000 of direct or indirect inflow or outflow of goods or services across State lines.

But $500,000 a year in revenues is well below the federal government’s standard for a “small business.” In fact, the Small Business Administration’s “Size Standards” consider most non-farm businesses a “small business” if they have revenues less than roughly $10 million (with some exceptions; based on two sets of standards at $7 million and $14 million).

So how many small business are eligible for unionization under EFCA? For that we turn to the US Census Bureau (before it was politicized and moved into the White House). There are roughly 1.8 million small business employing 31 million Americans that are eligible for unionization under EFCA.

Categories: Center for Union FactsEFACEnding Secret Ballots