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The Employer/Employee Balance In Franchise Businesses

Few things terrify most businesses as the possibility that they might have to treat their employees with even the tiniest degree of respect. They wage a never-ending battle to deny workers a decent wage, overtime, a safe workplace and any rights that a human being should expect. A recent decision regarding McDonald's employees put a scare into franchise businesses everywhere when the parent company, McDonald's was held to be a joint employer along with the franchisees that own and operate the individual locations. The holding opened up the possibility that these workers could more easily form unions and work together to push for decent treatment. A follow up ruling has given franchising businesses more wiggle room to protect these businesses from responsibility for unfair labor practices.

The question revolves around who actually employs a worker at a franchise business. Most fast food restaurants are operated as franchises. The franchising company requires individual stores to be operated with certain standards, but does not control every aspect of how the business is run. The National Labor Relations Board has now taken the position that the degree of control exercised by the franchising company may determine whether the employees are jointly employed or employed solely by the franchisee. 

Fast food restaurants are notorious for violating wage and hour laws. They routinely deny workers minimum wage or proper overtime pay. They may refuse to pay for "break time" despite not actually allowing workers to take a break. They may refuse to pay for time spent cleaning up and closing down the restaurant after it closes. The tricks are numerous and common. Holding the franchisor responsible for these routine violations would go a long way toward putting a stop to the violations of state and federal laws.

Source: The Business Journals, "Is the NLRB's war on franchising not as bad as feared?," by Kent Hoover, 13 May 2015 

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