Are You a Franchisee or Franchisor?  If So, We Need Your Help on Oct. 20!

October 5, 2015

Franchisees and franchisors across the country are still reeling from the National Labor Relations Board’s new joint-employer rule.

Under the NLRB’s Browning-Ferris ruling, franchisors may be held responsible for labor violations committed by franchisees, upending a 30-year standard and jeopardizing the independent operations of franchisees across the country.

Although the NLRB decision applies to federal law, state agencies may follow the NLRB’s lead. In fact, California has already passed a law that would make businesses liable for wage violations committed by subcontractors. The Michigan Chamber is pursuing state legislation to ensure that franchisees continue to have autonomy as independent business owners and operators under state laws.

The Michigan Senate is planning to hold a hearing on the legislative package this week and the House is scheduled to follow suit on October 20. We are looking for individuals willing to testify or send a letter of support for the Oct. 20 House committee hearing. Can we count on your support?

Senate Bills 492 and 493 and House Bills 4901 and 4902 would specify that an employee of a franchisee is not an employee of a franchisor unless: 1) they share in the determination or co-determination of matters governing the terms and conditions of the employee’s employment; and 2) they both directly and immediately control matters related to the employment relationship as it relates to hiring, firing, discipline, supervision and direction. 

Absent this legislation, state government may pursue action under state laws (e.g., wage and hour violations, workplace safety violations, etc.) against both franchisees and franchisors, creating further problems for franchisees wishing to maintain autonomy as a manager and employer. 

The franchise business model offers a turnkey solution for entrepreneurs wanting to start their own business with limited out-of-pocket investment and reduced risk. Please consider helping us pass SBs 492-3 and HBs 4901-2, legislation intended to provide Michigan franchisees with a measure of protection from the NLRB’s joint-employer ruling by limiting the trickle down effects under state laws.

Please contact Wendy Block, Director of Health Policy & Human Resources, if you are interested in getting involved in this legislative effort.