January 12, 2020

DOL Rule is Major Victory for America’s Franchise Businesses

(WASHINGTON, JAN. 12) – The International Franchise Association (IFA) today praised the U.S. Department of Labor (DOL) for its release of the Joint Employer Rule under the Fair Labor Standards Act.

“On behalf of IFA, I applaud the DOL for today’s decision to return to a simple, clear, and thoughtful joint employer standard,” said Robert Cresanti, IFA’s President and CEO. “This resolution provides much-needed clarity for the 733,000 franchise establishments across America, and returns to the traditional standard of business that has fundamentally supported and encouraged franchise entrepreneurship for decades.”

“I am very pleased with the bipartisan support this ruling received from Congress and look forward to removing the cloud of uncertainty over future franchise operations.”

By instituting a simple, four-part test to determine employer status, the DOL rule can clarify joint employer status, employer liability, and the roles and responsibilities of each party in a business relationship.

Economic studies show that, under a similar law, 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 93% increase in lawsuits against franchise businesses. 

Through this rulemaking, the DOL has successfully undone one of the nation’s most harmful economic regulations, which has cost the economy billions and slowed down hiring and job growth.