Franchise Leaders Converge on Capitol Hill to Push Joint Employer Bill

The International Franchise Association's Advocacy Summit runs Sept. 14-16 in Washington, bringing franchise owners to Capitol Hill to meet directly with members of Congress. The centerpiece of those meetings is the American Franchise Act, H.R. 5267, which would set a single federal standard for when a franchisor can be treated as a joint employer of a franchisee's workers.

Attendees are pressing for a consistent standard after the definition of joint employer changed repeatedly over the past decade, with different administrations taking different approaches through the National Labor Relations Board. The bill would specify that a franchisor would be considered a joint employer only if it exercises substantial, direct and immediate control over essential terms such as wages, hours, hiring and discipline. The legislation is limited to the franchisor-franchisee relationship and would not change the FTC Franchise Rule or state franchise laws.

The House Education and Workforce Committee approved the bill in July. H.R. 5267 now has about 142 bipartisan cosponsors and is awaiting consideration by the full House. A companion bill has also been introduced in the Senate.

Supporters of the bill say a consistent federal standard would give franchisors more clarity on the operating guidance they can provide to franchisees. They also argue that the legislation would reinforce the distinction between a franchisor and the independent business owner operating a local franchise.

The next step is getting the legislation to a House floor vote. From there, the Senate would have to consider its companion measure.

Read more on the Advocacy Summit here.

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