Congress introduces bipartisan American Franchise Act to end joint employer complications

Core Points - A bipartisan group of Congress members introduced the American Franchise Act to clarify the legal definition of joint employer, aiming to relieve franchisors from significant responsibility regarding franchisees' labor law compliance issues [1][2] - The bill emphasizes that franchisees are independent business owners who control their operations and labor relations, with franchisors only considered joint employers under specific conditions defined by the National Labor Relations Act [2][3] - The joint employer standard has evolved through various administrations, with significant changes occurring in 2015, 2017, and 2020, impacting the liability of franchisors for labor standards [4][5][6] Legislative Background - The Browning-Ferris Industries decision in 2015 established a precedent for holding franchisors liable for labor standards, even with indirect control over employees [4] - The 2017 Trump administration overturned this rule, and a new 2020 rule exempted franchisors from responsibility for franchisees' labor compliance [5] - In October 2023, the NLRB attempted to broaden the joint employer rule, but it was subsequently overturned by Congress and blocked by a federal judge in March 2024, reinstating the 2020 version of the National Labor Relations Act [6][7] Industry Support - The American Franchise Act has garnered support from various restaurant industry organizations, including the National Restaurant Association and the International Franchise Association [8]