Sponsors (5)
The bill aims to clarify when franchisors are jointly responsible—strengthening worker protections and reducing legal uncertainty—while creating higher compliance risks, potential costs, and tensions over franchisor control and franchisee autonomy that could affect businesses, consumers, and taxpayers.
Franchise workers (including millions employed in the sector) can more easily hold franchisors jointly responsible for wages, hours, and working conditions when franchisors actually exercise control, strengthening enforcement of wage/hour laws and clarifying collective-bargaining responsibilities.
The bill provides clearer, specific definitions and illustrative inclusions/exclusions about joint-employer status, reducing legal uncertainty for franchisors, franchisees, employees, and regulators.
Small-business franchisees gain clearer recognition as independent businesses in many cases, which can protect them from being treated as joint employers and limit unexpected liability.
Franchisors and franchisees may face higher compliance, administrative, and litigation costs if franchisors are found jointly liable under clarified standards, which can strain small businesses and increase burdens on taxpayers through enforcement and litigation.
Emphasizing franchisee independence in findings or interpretation could be used to limit franchisor liability in practice, risking reduced worker protections where franchisors evade responsibility for labor practices affecting franchise workers.
To avoid joint-employer liability, franchisors may reassert control or retract delegated responsibilities, reducing operational flexibility and autonomy for individual franchisees and complicating staffing or day-to-day operations.
Based on analysis of 4 sections of legislative text.
Codifies that franchisors are joint employers under the NLRA and FLSA only when they exercise substantial direct and immediate control over essential employment terms.
Introduced December 17, 2025 by Roger Wayne Marshall · Last progress December 17, 2025
Defines when a franchisor counts as a joint employer under federal labor law by adding parallel joint-employment standards to the NLRA and FLSA. A franchisor is a joint employer only if it exercises "substantial direct and immediate control" over one or more "essential terms and conditions of employment," using specified definitions and illustrative examples. The law borrows regulatory definitions of "franchise," "franchisor," and "franchisee" and makes the new rules apply only to proceedings started after the law takes effect.