Lawmakers Introduced a Bill to Make the Current Version of the Joint Employer Rule Permanent. Here's What It Means for the U.S. Franchise Industry.
Franchise owners could soon see relief from one of the industry's most contentious legal issues: the joint employer standard. A bill working its way through the U.S. House of Representatives aims to permanently define when two businesses can be considered joint employers — an issue with major implications for the more than 800,000 franchise establishments across the country. Together, those businesses generate hundreds of millions in annual economic output and support close to nine million jobs in the U.S.
The Save Local Business Act, sponsored by Rep. James Comer (R-KY), would lock in the current, narrower joint employer definition that requires "direct and immediate control" over essential terms of employment. This would replace the shifting regulatory standards that have bounced back and forth for more than a decade, depending on which party controls the National Labor Relations Board (NLRB).
At stake is the legal relationship between franchisors and franchisees. Under a narrow joint employer standard, franchisees are considered independent operators responsible for hiring, firing, scheduling and supervising their own employees. But under broader definitions — like the one the NLRB © Entrepreneur
