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The International Franchise Association is speaking out against a new law imposed by the National Labor Relations Board.
The franchising industry isn’t something to be overlooked—it employs more than nine million people and contributes more than $1 trillion to the American economy every year. But as a CNBC article points out, the franchising industry now has a government target on its back.
The National Labor Relations Board (NLRB) introduced a new joint employer law that will change the way local franchisees across the country hire employees, set wages, manage their staff and run their daily operations. The new ruling says a franchisor and franchisee can share the ability to govern workers’ terms and conditions of employment. In the past, those decisions were left up to franchisees. The NLRB is making these changes because it now considers companies with indirect and unexercised control, like franchises, to be joint employers instead of limiting it to companies with direct control over employment conditions.
“The NLRB ruling is a nebulous standard that allows them to target any business contractual relationship they want,” said Michael Layman, vice president of regulatory affairs for the International Franchise Association (IFA) in an interview with CNBC. “It doesn’t just affect the franchising industry. It affects how car manufacturers and car dealerships across the country oversee their workforces, too.”
The NLRB says the new ruling, which stems from a decision involving the waste management company Browning-Ferris out of California, is meant to ensure companies in all industries are held responsible for labor violations committed by their contractors. But franchise chains across the country, including major brands like McDonald’s, say the law undermines the franchise business model that’s been operating successfully for decades. The industry is committed to fighting the new regulations.
In an interview with CNBC, IFA chairman and NRD Capital managing partner Aziz Hashim said, “It is an attack by bureaucrats and union bosses that can stunt job growth and do damage in the economy. Franchising contributes $1.5 trillion annually to the U.S. economy and is the largest vocational system in America. We train people to do jobs and pay them at the same time. It’s a gateway to entrepreneurial opportunity. Why stymie its growth?”
Click here to read the original CNBC article.
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Cassie has over five years of digital and traditional media experience. She joined NLA after working as a television news producer in both Milwaukee and Chicago, and now specializes in aligning strategies across the board for her clients, ultimately building buzz and telling compelling stories through content marketing, social media, digital campaigns and traditional PR.
Cassie has a Bachelor of Arts in Broadcast and Electronic Communications from Marquette University. In her spare time, Cassie enjoys traveling and exploring what new cities have to offer in addition to spending time with her friends and family.
