7.21.17

On Wednesday, July 12, 2017, the Department of Labor withdrew an Obama-era guidance, which expanded the scenarios when franchisors were “joint employers” with franchisees. Under the previous guidance, franchisors could potentially be held liable for wage-law violations by franchisees in a wide variety of circumstances. As of Wednesday, that previous guidance has been withdrawn.

The withdrawal of the previous guidance is seen as a victory for franchisors. In a statement issued by the International Franchise Association spokesman Matt Haller, the IFA stated “[w]hile uncertainty surrounding the new joint employer standard has made it harder for America’s 733,000 franchise owners to grow and create new jobs, we are pleased the DOL is taking first steps to undue this costly regulation created by the previous administration.”

Of course, this rollback of the Obama-era guidance does not affect decisions made by other federal agencies. Notably, the National Labor Relations Board has yet to make a final ruling on the joint employer issue.

Should you have any questions or wish to discuss the impacts this rollback may have on your business, we encourage you to contact our firm at (813) 223-1099, Mr. Dennis Leone at dleone@shankmanleone.com, or Mr. Jonathan Stitt at jstitt@shankmanleone.com.