Federal Labor Regulatory Office on Tuesday proposed a rule This will make more companies legally liable for labor law violations by contractors and franchisees.
Under the proposal, which applies when a company is considered a so-called joint employer, the National Labor Relations Board recommends that one of the franchisees should join the union even if the parent company only uses indirect labor. You can hold companies like McDonald’s accountable if you fire workers for doing so. control workers. Indirect controls may include requiring franchisees to use software that locks down certain scheduling methods or placing limits on how much workers are paid.
The current approach is to Adopted in 2020when the board had Republican-majority appointees, the parent company could be held liable for such labor law violations only if it had direct control over the employees of the franchisee-schedule and direct determination of salaries, etc.
Co-employer rules also determine whether the parent company must negotiate with contractor or franchisee employees if the employees are unionized.
Employees and unions generally prefer to negotiate with their parent companies and take responsibility for labor law violations.
“In an economy of increasingly complex employment relationships, boards must ensure that: Legal rules for determining which employers should participate in collective bargaining It serves the goals of the National Labor Relations Act,” said Lauren McFerran, chairman of the Democratic-majority board. in a statement.
The legal criteria for initiating a joint-employer relationship under labor law have changed frequently in recent years, depending on the political composition of the Labor Commission. In 2015, the Democratic-led board changed the standard from “direct and immediate” control to indirect control.
As a result of that change, parent companies may be considered co-employers of workers employed by contractors or franchisees, provided the parent company has the right to control certain working conditions, such as dismissing or disciplining employees. There is a nature. right.
Under President Donald J. Trump, the board has moved to undo that change. The Republican-led board not only restored the standard of direct and direct control, but required that the control exercised by the parent company be “substantial,” further requiring that the parent company be considered a co-employer. made it difficult.
The franchise business model faces increasing pressure. On Monday, California Gov. Gavin Newsom said he signed into law a bill creating a council to regulate labor practices in the fast food industry. The council has the power to raise the industry minimum wage in California to $22 next year from the statewide minimum wage of $15.50 and to issue health and safety standards to protect workers.
The fast food industry strongly opposed the measure, arguing that it would raise costs for employers and prices for consumers.