The bill sets a test for when a franchisor may be treated as a joint employer of a franchisee’s workers under the National Labor Relations Act and the Fair Labor Standards Act. A franchisor must have and use substantial, direct, and immediate control over at least one key job condition, such as pay, benefits, hours, hiring, firing, discipline, supervision, or work assignments. The control must have a regular or ongoing, meaningful effect; sporadic, isolated, or minor control does not count. The bill lists examples of brand standards and support that do not, by themselves, count as direct and immediate control. It would not apply to proceedings started before enactment.
Franchise workers, franchisees, and franchisors could be affected by how the new test determines who is an employer under these two federal laws. The bill does not change who makes day-to-day employment decisions unless the franchisor meets the stated test.
No publicly available information.
The bill’s findings say that franchisors set standards to maintain consistent goods and services, while franchisees are independent owners who manage daily operations and labor relations. The findings also state that uncertainty about joint-employer rules has affected the viability of franchising.
No publicly available information.