The International Franchise Association (IFA) has praised the U.S. Department of Labor (DOL) for its release of the Joint Employer Rule under the Fair Labor Standards Act.
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By instituting a four-part test to determine employer status, the DOL rule can clarify joint-employer status, employer liability, and the roles and responsibilities of each party in a business relationship.
Robert Cresanti, IFA’s President and CEO, said: “On behalf of IFA, I applaud the DOL for today’s decision to return to a simple, clear, and thoughtful joint employer standard.
“This resolution provides much-needed clarity for the 733,000 franchise establishments across America, and returns to the traditional standard of business that has fundamentally supported and encouraged franchise entrepreneurship for decades.
“I am very pleased with the bipartisan support this ruling received from Congress and look forward to removing the cloud of uncertainty over future franchise operations.”
In its statement, the IFA cites that economic studies show that, under a similar law, the expanded joint employer standard has cost the American economy $33.3 billion per year, led to 376,000 fewer job opportunities, and resulted in a 93 per cent increase in lawsuits against franchise businesses.
“This DOL rule removes the same barriers that led to those costs – that means that franchise businesses can better plan, better hire, better share their knowledge, and better grow,” said Cresanti.
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