American Franchise Act
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Progress
Where this bill stands in the legislative process.
- Introduced
- Passed House
- Passed Senate
- To President
- Became Law
Overview
The American Franchise Act aims to clarify the legal relationship between franchisors and franchisees, particularly regarding employment law. It seeks to prevent broad interpretations of ‘joint employer’ status that could negatively impact the franchise business model. The bill clarifies the definition of ‘direct and immediate control’ for wages, benefits, hours, hiring, discharge, discipline, supervision, and direction, specifying when a franchisor exercises such control and when they do not. It also amends the Fair Labor Standards Act to align with these clarifications.
Key provisions
- Defines ‘direct and immediate control’ for wages, benefits, hours, hiring, discharge, discipline, supervision, and direction in the context of franchising.
- Clarifies that franchisors do not exercise control over a franchisee’s arm’s-length benefit plans.
- Establishes that encouraging staffing changes or setting minimal recruiting standards does not constitute ‘direct and immediate control’ over hiring.
- Specifies that bringing misconduct to a franchisee’s attention for discharge decisions does not constitute ‘direct and immediate control’ over discharge.
- Defines ‘substantial direct and immediate control’ as having a regular or continuous effect on employment terms.
- Amends the National Labor Relations Act to incorporate these clarifications.
- Amends the Fair Labor Standards Act to align with the National Labor Relations Act amendments.
- States that the Act’s provisions do not apply to existing legal proceedings.
Bill text
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Sponsors
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157 on record
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Cosponsors
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