Franchise owners are potentially facing relief from the joint employer standard issue due to a bill in the U.S. House of Representatives. This bill aims to define when two businesses can be considered joint employers, impacting more than 800,000 franchise establishments in the U.S., which support almost nine million jobs. The Save Local Business Act proposes to maintain a narrower joint employer definition requiring 'direct and immediate control' over employment terms, replacing fluctuating definitions influenced by political shifts. This bill focuses on preserving the independence of franchisees in managing their operations and employees.
The Save Local Business Act, sponsored by Rep. James Comer (R-KY), would lock in the current, narrower joint employer definition that requires 'direct and immediate control' over essential terms of employment.
Under a narrow joint employer standard, franchisees are considered independent operators responsible for hiring, firing, scheduling and supervising their own employees.
The 2023 rule faced immediate backlash from the business community, including franchise owners, labor attorneys and trade organizations, led by the International Franchise Association.
Many argued that it was too vague and broad, leaving employers uncertain about their legal responsibilities.
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