Sponsors (5)
The bill creates clearer, uniform rules for franchise relationships and joint-employer tests that reduce uncertainty for businesses and regulators, but it risks weakening worker accountability, shifting costs and litigation burdens onto franchisees and consumers, and denies retroactive relief for ongoing cases.
Franchisors and franchise systems (and indirectly many small businesses) gain clearer, statutory recognition of franchise relationships, reducing legal uncertainty and making business arrangements more predictable.
Businesses, regulators, and workers benefit from a single, clarified joint-employer test (aligning FLSA and NLRA standards) that simplifies compliance and enforcement across wage and labor law.
Employees and unions gain clearer criteria for when a franchisor is a joint employer, which can make it easier in some cases to determine rights around collective bargaining and representation.
Workers (and unions) may face reduced ability to hold franchisors accountable for labor violations if the statute narrows joint-employer liability, limiting remedies and oversight of brand owners.
Many franchisees (small businesses) could face higher compliance costs or new legal exposure if franchisors impose stricter control requirements or if the test produces uncertain allocation of liability between franchisor and franchisee.
The bill may prompt more litigation over control-based facts between franchisors and franchisees, raising legal costs, diverting management attention, and potentially increasing consumer prices.
Based on analysis of 4 sections of legislative text.
Introduced December 17, 2025 by Roger Wayne Marshall · Last progress December 17, 2025
Defines when a franchisor can be treated as a joint employer of a franchisee’s workers and narrows joint-employer liability under federal labor and wage laws. It sets specific legal definitions and a high threshold — “substantial direct and immediate control” over essential terms of employment (wages, hiring, discipline, supervision, hours, benefits, etc.) — that a franchisor must both possess and exercise before being deemed a joint employer. The bill adopts existing regulatory definitions of franchise relationships, gives concrete examples of what does and does not count as control, applies the same standard to both the National Labor Relations Act and the Fair Labor Standards Act, and says the new rules do not apply to proceedings that started before the law’s enactment.