HR 5267 narrows franchisors' joint employer liability

What does this do?

This bill sets a legal test for when a franchisor, like a corporate brand, can be held jointly responsible with a franchisee for how workers are treated. A franchisor only qualifies as a joint employer if it actually and regularly makes real decisions about things like pay, hours, hiring, or firing. Setting brand standards, safety rules, or store hours does not count as joint employment under this bill.

Who does it affect?

This affects franchise companies such as restaurant chains, hotel brands, and retail franchises, along with the independent owners who run franchise locations and the workers employed there. The new standard applies only to legal cases filed after the bill becomes law.

Why does it matter?

Franchisors who do not directly control workers would face less legal exposure for labor violations at franchise locations. Franchisees and their workers would need to look primarily to the local business owner, not the corporate brand, to resolve workplace disputes.

Where does it stand?