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New York Joint Employer Bill Re-Introduced

New York S.B. 152 represents one of the latest attempts by labor and others to dismantle the franchise model through legislation.

By Dean A. Heyl, CFE, and Jeff Hanscom

 

 

Once again, the New York Senate is considering an ill-advised piece of legislation that would undermine the franchise model. Senate Bill 152 (S.B. 152), which is identical to last session’s S.B. 6455, was referred to the Senate Labor Committee on Jan. 7.

What the Bill Does

The stated purpose of S.B. 152 is to raise the minimum wage, but the bill does much more than this. For starters, it defines “large employers” and “franchisees” in such a manner that the difference between franchisors and franchisees is blurred. The next problematic provision is the establishment of a $15 an hour wage containing a consumer price index for inflation. Keep in mind, this is only applicable to “formula retail stores,” which would include franchisees’ businesses. Echoing the actions of the National Labor Relations Board’s general counsel, the bill holds that parties to a franchise agreement “shall be jointly and severally responsible for any violation” of this new statute. Finally, the legislation contains a clause waiving the requirements of the statute if a formula retail store enters into a collective bargaining agreement.

IFA Actions

Through the International Franchise Association’s Franchise Action Network, franchisors and N. Y. franchisees have been activated to oppose S.B. 152. Additionally, IFA has been meeting regularly with legislators and staff explaining how detrimental the bill would be for franchisees, franchisors and the state’s economy. We have built a broad-based coalition including business groups such as the Retail Council of New York State to fight this threat to franchising, and will continue engaging legislators, business advocates and the news media regarding this and other attacks on the franchise model.

Context

N. Y. S.B. 152 represents one of the latest attempts by labor and others to dismantle the franchise model through legislation. As mentioned earlier, S.B. 152 is an exact copy of a previously introduced bill which died in the Senate Labor Committee last year. New York is not the only state to face such harmful legislation. In January, similar legislation targeting franchise small businesses was introduced in the Massachusetts Senate as S.D. 852. Last year, the Connecticut House members rightly rejected House Bill 5069, “An Act Concerning Low Wage Employers,” which would have required franchisors to pay their franchisees’ employees a surcharge of 30 percent of the state’s minimum wage.

Now that the NLRB’s general counsel has filed complaints alleging that franchisors can be held to be joint employers, we can expect more activist state and local governments to follow suit. IFA will continue to fight any such proposals that discriminate against franchise businesses. Our message is clear, “We are not asking for special treatment, just equal treatment.”

Dean A. Heyl, CFE, is vice president of state government relations, public policy and tax counsel and Jeff Hanscom is director, state government relations and public policy of the International Franchise Association. Find them at fransocial.franchise.org.

 

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