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Labeling Franchisees as “Joint-Employers” Will Negatively Alter the Employment Landscape

On June 24, 2014, a panel of industry, labor and legal representatives testified before the Subcommittee on Health, Employment, Labor and Pensions of the House Committee on Education and the Workforce. The hearing covered a position the National Labor Relations Board (NLRB) may take on joint-employer status that would negatively affect businesses, particularly the franchise segment. As the CEO of a franchisor, and as an International Franchise Association (IFA) Board Member, I testified about the harmful effects of joint-employer status on franchising. It’s important to understand that the relationship between franchisors and franchisees is one of mutual benefit, but separate operation. Franchisees are entrepreneurs who hire, manage and fire their own employees. There’s no reason for government to mandate needless changes to an entrepreneurial system that works.

A link to the IFA’s report on the issue, the hearing and a Wall Street Journal Live segment is here.

A link to the complete hearing is here. If you don’t have time to watch the entire session, a good starting point for context is at 48:13.

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