Washington, D.C. (April 1, 2019)—Today, the Job Creators Network (JCN) applauds the Labor Department’s proposed test to determine if a small business franchise is able to act independently. Under a broader rule, franchisors would be liable for the thousands of daily decisions made by what are essentially independent small businesses.
Under the proposal, the DOL will use four factors to determine if joint employer liability is required:
1.) Who is empowered to hire or fire employees?
2.) Who supervises and controls employee work schedules or conditions of employment?
3.) Who determines wage levels and method of payment?
4.) Who maintains employee records?
“The proposed four-factor test for determining where joint employer liability is applied is a big win for the franchise business model that is responsible for millions of jobs and entrepreneurial opportunities,” said Alfredo Ortiz, JCN President and CEO. “Protecting businesses from frivolous lawsuits targeted at franchises of which they have no direct control will not only preserve the financial viability for trusted brands, but will allow small business franchises to continue acting autonomously. While it’s clear the DOL is already pursuing the issue, Congress should also address the definition of joint employer in order to solidify the standard for years to come.”