American Franchise Act
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Progress
Where this bill stands in the legislative process.
- Introduced
- Passed Senate
- Passed House
- To President
- Became Law
Overview
The American Franchise Act aims to clarify the legal relationship between franchisors and franchisees, particularly regarding joint employment liability. It modifies the National Labor Relations Act and the Fair Labor Standards Act to define ‘direct and immediate control’ in the context of franchising, specifying when a franchisor can be considered a joint employer. The bill seeks to protect the franchise business model by establishing clear guidelines for control and preventing broad joint employer liability based on inherent franchise relationships.
Key provisions
- Defines ‘direct and immediate control’ for wages, benefits, hours of work, hiring, discharge, discipline, supervision, and direction in the context of franchising.
- Establishes ‘substantial direct and immediate control’ as the standard for determining joint employer status.
- Clarifies that franchisors cannot control benefits provided by franchisees to their employees.
- Excludes certain franchisor actions (e.g., encouraging staffing changes, setting minimal standards) from being considered ‘direct and immediate control’.
- Defines ‘essential terms and conditions of employment’ to include wages, benefits, hours, hiring, discharge, discipline, supervision, and direction.
- Specifies that the Act does not apply to legal proceedings initiated before its enactment.
- References and incorporates definitions from existing regulations regarding franchises, franchisees, and franchisors.
- Extends the joint employer definition from the National Labor Relations Act to the Fair Labor Standards Act.
Bill text
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Sponsors
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5 on record
Primary sponsor
Cosponsors
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