US Capitol Building (Credit: mbell / Getty Images)
A bipartisan group of 14 lawmakers, led by Reps. Kevin Hern (R-OK) and Don Davis (D-NC), has introduced legislation that would amend the National Labor Relations Act’s definition of “joint employer” to align federal statute with National Labor Relations Board policy.
The American Franchise Act was introduced Wednesday. Proponents say the bill would dispense with some complications faced under the current rule. Specifically, the bill states that franchisors would be considered joint employers “only if they possess and exercise substantial and immediate control over essential terms and conditions of employment, like hiring workers, firing workers, setting wages and disciplinary action,” according to a press release from Hern.
Hern previously owned 24 McDonald’s restaurant franchises and sold his last restaurant in 2021.
The definition of joint employer has changed frequently in recent years, depending on the administration. Those changes have “caused costly uncertainty in the industry for too long,” Davis said on social media.
The International Franchise Association said it plans a “full-scale national and regional advocacy push for the legislation through its membership and as a founding member of the Coalition to Save Local Businesses (CSLB).”
“This legislation recognizes that franchisees are small businesses, and their independence must be protected by federal law,” IFA President and CEO Matt Haller said. “The American Franchise Act allows franchisors to properly support their franchisees — who are often first-time business owners from all walks of life — without the fear of an overly broad joint employer standard undermining the unique benefits of the franchise relationship. On behalf of America’s 831,000 franchise small businesses, we are grateful that the decade-long uncertainty around joint employer policy can finally come to an end.”
The bill has been referred to the House Committee on Education & the Workforce for further review.