EXPANDED JOINT EMPLOYER STANDARD COST $33.3 BILLION ANNUALLY

January 28, 2019

Jenna Weisbord, 310-995-0839
jweisbord@franchise.org
@
franchising411

EXPANDED JOINT EMPLOYER STANDARD COST $33.3 BILLION ANNUALLY

New IFA Research Shows That Expanded Joint Employer Standard Also Resulted in 376,000 Fewer Job Opportunities and Led to 93% More Lawsuits; 92% Say it’s Harmed Their Brand

(WASHINGTON, January 28) – The International Franchise Association (IFA) today announced that an 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 93 percent increase in lawsuits against franchise businesses.

The findings, included in an economic impact study filed as part of IFA’s comments to the National Labor Relations Board (NLRB) on its joint employer rulemaking, demonstrate the economic harm caused by an expanded joint employer standard to franchise businesses and the American economy.

“This groundbreaking research demonstrates what businesses have long said: an expanded joint employer standard hampers their growth, hinders their operations, and halts their hiring. Its harms on the economy are clear, and regulators and elected officials should move quickly to return to a narrow, clearly-defined joint employer standard,” said IFA President and CEO Robert Cresanti.

As part of this research, IFA along with noted U.S. Chamber of Commerce Economist Dr. Ronald Bird, conducted more than 75 approximately hour-long interviews with franchise brand executives and franchise owners to determine the economic impact of the joint employer model. This groundbreaking research project is the first to interview franchise businesses in a statistically significant and economically sound way on the joint employer standard.

In addition to the economic impacts, IFA research found that 92 percent of surveyed franchise brands and franchise business owners say that an expanded joint employer standard has led to less support from their brands. This fear of joint employer liability under an expanded doctrine has caused franchise brands to “distance” themselves from franchisee owners by curtailing guidance regarding compliance with labor and employment laws, limiting training programs, withdrawing assistance with marketing and cost control practices, and eliminating other previously-provided services. 

Further, IFA research shows that an expanded joint employer standard has been used to advance a corporate campaign against franchise businesses. This campaign, and the resulting lack of clarity over the joint employer standard, has led to a 93 percent increase in lawsuits against franchise businesses.

Monday marks the deadline for the public comment period for the NLRB’s rulemaking process. Additional information on IFA’s research, as well as the submitted comments, are available at www.jointemployerfacts.com.

About the International Franchise Association

Celebrating 58 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 733,000 franchise establishments that support nearly 7.6 million direct jobs, $674.3 billion of economic output for the U.S. economy and 2.5 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.