Franchise Protection: Clear Employment Rules for Franchisees
This Act aims to protect the franchise business model by clearly defining when a franchisor can be considered a joint employer of a franchisee's employees. These changes are intended to prevent franchisors from being held liable for the personnel decisions of franchisees, which could negatively impact the growth and stability of small franchise businesses. As a result, citizens operating franchises will gain greater legal certainty in managing their employees.
Key points
The Act specifies that a franchisor is a joint employer only if it has direct and substantial control over essential terms and conditions of employment, such as wages, benefits, hours, hiring, discharge, discipline, supervision, and direction of the franchisee's employees.
It clarifies that standard franchisor activities, like setting operating hours, minimum safety standards, or offering training materials, do not make them a joint employer.
The changes aim to provide stability and predictability for franchisees, protecting their independence in personnel management and reducing legal risks for franchisors, which may foster job creation.
Status:
Introduced
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