Sponsors (135)
This bill narrows when franchisors can be treated as joint employers, trading greater legal clarity and lower liability for franchised businesses against reduced routes for workers and unions to hold franchisors accountable and potential shifts of costs and risks onto employees and small franchise owners.
Franchise owners (franchisees) are more likely to be treated as independent small-business owners, preserving day-to-day autonomy and reducing the risk of being classified as joint employers, which lowers their legal liability and compliance costs.
Franchisors gain clearer rules limiting when they can be held a joint employer, reducing litigation risk and regulatory uncertainty for franchised businesses.
Employees, employers, and courts get a more predictable legal standard for joint‑employer status in franchising disputes, improving legal clarity for dispute resolution.
Workers — especially low-wage employees in franchised chains — may lose a practical pathway to hold franchisors jointly responsible for labor violations, weakening workplace protections and access to remedies.
Labor unions and enforcement agencies could have reduced leverage to address systemic labor issues in franchised chains, diminishing workers' ability to negotiate or enforce workplace standards.
Franchisors may restructure relationships or emphasize non-regular forms of influence to avoid meeting a 'substantial control' threshold, leaving workers with weaker protections in practice.
Based on analysis of 4 sections of legislative text.
Narrows franchisor joint‑employer liability under the NLRA and FLSA by requiring "substantial direct and immediate control" over essential employment terms.
Official title: To preserve the franchise business model.
Introduced September 10, 2025 by Kevin Hern · Last progress September 10, 2025
Changes federal labor-law tests so franchisors are treated as joint employers only when they exercise "substantial direct and immediate control" over essential employment terms. The bill inserts franchise-specific definitions and a stricter joint‑employer standard into the NLRA and the FLSA and exempts proceedings started before enactment.