USA | The National Restaurant Association has supported the Joint Employer Definition codified by the American Franchise Act.
The decade-long fight over the definition of a “joint employer” is one step closer to an end, following the introduction of the American Franchise Act today in the U.S. House of Representatives. The National Restaurant Association has supported the move to codify a “direct and immediate” joint employer standard that would provide clear and stable guidance for franchised restaurants while protecting the integrity of the franchise business model.
Small business owners operate nearly a quarter of a million franchised restaurants in communities across the country and employ more than four million people. Franchising is a vital business model because it often makes starting a restaurant more economically feasible for individuals with dreams of being a part of the industry and owning their own business.
The local owner hires staff, organises scheduled events, manages payroll, and oversees daily operational tasks. The joint employer standard helps business owners understand how a franchisor and a franchisee are responsible for the operation of the business.
The American Franchise Act would make it easier for these restaurant owners to determine their responsibilities as an employer by amending the Fair Labor Standards Act (FLSA) and the National Labor Relations Act (NLRA) to clarify that: “A franchisor may be considered a joint employer of the employees of a franchisee only if the franchisor possesses and exercises substantial direct and immediate control over one or more essential terms or conditions of the employees of the franchisee.”
The American Franchise Act affirms that while franchisors set uniform standards to protect their brand and ensure consistency, franchisors and franchisees remain independent businesses.
“Restaurants are the cornerstone of the American economy and a vital source of employment. In the last decade, the ‘joint employer’ standard has changed four times, the constant regulatory whiplash leaving restaurant owners confused and apprehensive,” said Sean Kennedy, executive vice president for Public Affairs for the National Restaurant Association.
“American Franchise Act creates a clear ‘joint employer’ standard based on direct and immediate control of the conditions of their workforce’s employment. This permanent definition would encourage entrepreneurship and stimulate economic growth in communities across the country.”
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