Cresanti's Corner: Joint Employer Win

Cresanti's Corner
Cresanti's Corner Image

Dear IFA members,

Since becoming President and CEO of IFA, I have heard the words “joint employer” more times than I care to admit. And if you receive IFA emails and materials, you likely have too.

For years, franchise businesses have struggled under an expansive and unclear joint employer standard. However, the February 25 final rule by the National Labor Relations Board fixes that. By restoring clarity and common sense to the definition of ‘joint employer,’ America’s franchise brands and franchise businesses will be able to grow and give back to their communities with a clear understanding of the roles and responsibilities of each party.

Between the February 25 rulemaking, the Department of Labor’s final rulemaking on joint employer, and the NLRB’s decision in the years-long McDonald’s case, the past three months represent an unparalleled amount of pro-franchise actions from the federal government – in fact, it’s safe to say that that time period has been the most monumental period of pro-franchising policy victories in years.

The expanded joint employer standard has cost the American economy $33.3 billion per year, led to 376,000 fewer job opportunities, and resulted in a stunning 93% increase in lawsuits against franchise businesses, according to an economic impact study jointly conducted by IFA and the U.S. Chamber of Commerce.

This groundbreaking research demonstrated what businesses have long said: an expanded joint employer standard hampered growth, hindered operations, and halted hiring. It meant less compliance, less training, hard decisions, and harder conversations for thousands of franchise business owners around the country, who simply sought an accessible and inclusive entryway to the American dream but were instead met with red tape and redder balance sheets.

All told, America’s 733,000 franchise businesses and the 7.6 million workers they employ face a better business climate thanks to this rule. To learn more about franchising in your community, visit www.franchiseeconomy.com.