Main Street in Jeopardy: Stakeholders Agree Joint Employer Is Major Issue

By: Haider Murtaza

On Tuesday, June 21, the International Franchise Association (IFA) and the U.S. Chamber of Commerce issued a report titled, “Main Street in Jeopardy”, that focused on the National Labor Relations Board’s (NLRB) expanding joint employer standard and its threat to small businesses. A discussion panel was held in addition to the report on how it is affecting the small business community and what efforts are being provided to tackle these issues.

U.S. Representative Henry Cuellar (D-TX-28) opened the discussion by addressing his concerns for the standard. Congressman Cuellar has been a leading voice in Congress for franchise small business owners and a return to the traditional standard of joint employer. His beliefs are informed by his background as a small business owner, referencing his awareness of the struggles of paying overhead expenses and taxes as a small business owner. As challenging as it has been, Congressman Cuellar affirmed his support and intentions for Congress to act on the issue this year. His message was clear, “stop the funds that require regulation to pass.”

The panelists shared the similar notions and listed the many burdens they face from federal agencies such as the NLRB and Department of Labor’s Wage and Hour Division in regards to the standard. However, the most significant panel discussion involved franchise small business owners Lynn Berberich (franchisee of BrightStar Healthcare), Mara Fortin (franchisee of Nothing Bundt Cakes), and Howard James (franchisee of FastSigns) who expressed their concerns regarding the impact the standard would have on their operations. The group noted that resources from franchisors have been limited, resulting in higher out-of-pocket expenses. Berberich mentioned an applicant backing system that was no longer a resource through her franchisor, and now she is responsible for the expense of having a proper tracking system for her business. These increase in expenses meant an increase of costs for their clients. Mara Fortin, a former lawyer herself, lamented that the new standard would encourage litigation. These small business owners agreed that direct control of their employees is paramount to successful operations, and this new standard jeopardizes their dreams of running a small business.

Haider Murtaza is an intern of government relations and public policy at International Franchise Association

Date Posted: 2016-06-22 17:03:24