Alexander, Kline 'Joint Employer' Legislation Critical to Preserving Franchise Small Business Ownership and Job Creation
FOR IMMEDIATE RELEASE
ALEXANDER, KLINE 'JOINT EMPLOYER' LEGISLATION CRITICAL TO PRESERVING FRANCHISE SMALL BUSINESS OWNERSHIP AND JOB CREATION
WASHINGTON, Sept. 9, 2015 – The International Franchise Association, the world’s largest organization representing franchise owners, today applauded Chairmen Sen. Lamar Alexander (R-TN), Sen. Johnny Isakson (R-GA), Rep. John Kline (R-MN) and Rep. Phil Roe (R-TN) for introducing S. 2015 & H.R. 3459, the Protecting Local Business Opportunity Act. The legislation preserves franchising as a viable business model for small business ownership and job creation by invalidating a recent National Labor Relations Board (NLRB) ruling and restoring an appropriate legal standard for determining who is a joint employer.
“Franchising is a pillar of the free enterprise system and creates opportunities for small business ownership and employment on nearly every Main Street in America, but the NLRB has overreached and put the future of franchising in jeopardy with the stroke of a pen,” said IFA President & CEO Steve Caldeira, CFE. “We applaud Chairman Alexander and Rep. Kline for their collective efforts to overturn this ruling so that we can restore certainty to franchising so that our members can continue to create new businesses and much-needed jobs, which franchising does at a faster rate than other businesses.”
On Aug. 27, the NLRB released its “joint employer” decision declaring Browning-Ferris Industries to be a joint employer with Leadpoint, a staffing services company. This decision overlooked over 50 years of regulatory and legal precedent and retroactively adopted a far broader definition of a joint employer, which will irreparably harm the franchise model of business.
Current law dictates that franchisors and franchisees are not joint employers and it is the franchisees that are solely responsible for the setting of wages for employees and day-to-day operations of their businesses. If franchisees and franchisors are considered to be joint employers, franchisees won’t be able to hire as many workers in their local communities, won’t be able to expand and grow, and some may even have to close their businesses.
The proposed legislation would amend the National Labor Relations Act (29 U.S.C. 152(2)) by adding the following: “Two or more distinct entities may be considered joint employers for purposes of this Act if each shares and exercises control over essential terms and conditions of employment and such control over these matters is direct and immediate.” If passed, this legislation’s definition of joint employees would protect the long-established successful franchise model.
“Through our ongoing and focused advocacy, legislative and regulatory efforts along with the Coalition to Save Local Businesses, IFA has been leading the charge against the recent NLRB ruling and the threat it poses to the franchise business model and economic growth. This is not a political issue, it is about the future of small business in America and we look forward to working with members of both parties to ensure franchising remains an integral part of the fabric of the American economy,” Caldeira added.
About the International Franchise Association
Celebrating 55 years of excellence, education and advocacy, the International Franchise Association is the world's oldest and largest organization representing franchising worldwide. IFA works through its government relations and public policy, media relations and educational programs to protect, enhance and promote franchising and the more than 780,000 franchise establishments that support nearly 8.9 million direct jobs, $890 billion of economic output for the U.S. economy and 3 percent of the Gross Domestic Product (GDP). IFA members include franchise companies in over 300 different business format categories, individual franchisees and companies that support the industry in marketing, law, technology and business development.
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