Sponsors (125)
The bill clarifies and narrows joint‑employer rules to protect franchise autonomy and reduce litigation for franchisors and franchisees, but it does so at the cost of weakening workers' ability to hold franchisors accountable and potentially shifting risks and costs onto franchisees and employees.
Small-business franchise owners retain recognition as independent business owners with control over day-to-day operations and labor relations, preserving entrepreneurial autonomy.
Franchisors and franchisees gain clearer, narrower joint‑employer rules that reduce litigation and regulatory uncertainty, lowering legal and compliance costs.
Consumers and franchise businesses benefit from clarified franchisor responsibilities to set and enforce uniform quality and marketing standards, which helps protect brand value and consumer expectations.
Low-income workers and unions lose avenues to hold franchisors jointly responsible for labor violations, weakening worker protections and recourse.
Unions and enforcement agencies have reduced leverage to address systemic labor issues across franchised chains, making enforcement of standards harder.
Employers may restructure relationships to avoid meeting a 'substantial control' threshold, leaving workers with weaker protections and fewer remedies.
Based on analysis of 4 sections of legislative text.
Narrows joint-employer liability by requiring franchisors to have and exercise "substantial direct and immediate control" over essential employment terms to be joint employers under the NLRA and FLSA.
Changes how federal labor law treats franchisors and franchisees by adding a specific, narrower test for when a franchisor is a "joint employer." It amends the National Labor Relations Act and the Fair Labor Standards Act to say a franchisor is a joint employer only if it regularly and continuously exercises "substantial direct and immediate control" over one or more essential terms and conditions of a franchisee’s employees (wages, benefits, hours, hiring, firing, discipline, supervision, direction). The law also defines franchise terms by reference to federal franchise regulations, lists which employment matters count as "essential," excludes isolated or de minimis control from making a franchisor a joint employer, and says the rule does not apply to cases already started before the law takes effect.
Introduced September 10, 2025 by Kevin Hern · Last progress September 10, 2025