The new labor law will not be accepted gladly by the homebuilders. A new labor law ruling has placed the homebuilders answerable to the issues involving millions of subcontractors, as reported by cnbc.com. The 25 categories of subcontractors, such as the roofers, plumbers, electricians, and framers are employed to build homes. They have been regarded as "joint employees" of the homebuilders by the National Labor Relations Board (NLRB).
Tomas Woods, the chairman of the National Association of Homebuilders (NAHB) explained that the homebuilding industry will be badly affected by the new standards, considering that the industry primarily relies on the work of the subcontractors. CNBC noted that the revised standard is designed to provide positive effects to the economy in which it would "better effectuate the purpose of the Joint Employment Act in the current economic landscape". CNBC also noted the evaluations and assessments of the new ruling has been done. Ken Gear, an attorney hired the Leading Builders of the America, which is the association of the nation's largest public homebuilders, clarified that this turn will "create uncertainty".
Furthermore, he could not yet verify how serious the impact would be to the business and to the economy in general. According to a previous report by CNBC, the new ruling of NLRB was patterned to a different industry, and it is expected that it will also apply to the builders. It appears that the law is confusing to the builders. According to a statement by builderonline.com, "What's confusing many builders is how the fluid nature of subcontracting, where a framer works for Lennar one day and Pulte the next, can really be nailed down."
Builders say they will not back down, instead, they are ready to stand and fight to reverse the ruling, as soon as a case should be filed. Builders have anticipated this to happen very soon, and they are willing to take the risk. Jerry Howard, the current CEO of NAHB affirmed that it is incredibly impractical for the builders to implement a different business model. It further speculated that the builders have been successfully using a business model that has been working for 200 years.