This New Labor Ruling Could Be a Huge Win for McDonald’s and Other Franchise Chains

by Evil HR Lady on September 14, 2018

On a normal day you might stop at Dunkin’ Donuts for coffee, drop off a package at the UPS Store, get a late lunch at McDonalds, make a quick phone call to Kumon to check on your child’s latest test scores, get your hair cut at Great Clips, and get your oil changed at Midas. What do all of these companies have in common? They just breathed a collective sigh of relief today at the National Labor Relations Board’s announcement of a new joint employer standard.

Every one of these businesses operates as franchises. That is, instead of one corporate office owning all the stores, they sell the rights to open a store with that name. The list of businesses that operate as franchises is almost endless.

Under an Obama era ruling, the joint employer standard was changed to make it more likely that the corporate office would be equally liable for managing employees. That means that if the person who owns the McDonald’s franchise in your neighborhood fails to pay overtime, the corporate entity is also responsible. This new proposed rule takes things back to how they were pre-2015.

To keep reading, click here: This New Labor Ruling Could Be a Huge Win for McDonald’s and Other Franchise Chains

{ 5 comments… read them below or add one }

cajun2core September 14, 2018 at 6:12 pm

In a franchise, who hires the manager of each store? Is it a district manager or the owner?

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Evil HR Lady September 14, 2018 at 6:13 pm

Generally speaking, the owner would.

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Goober September 14, 2018 at 7:59 pm

Yeah, but some franchises exert a *lot* of control over franchisees’ business practices, including, at time, employment policies. McDonald’s is known for how tightly they control operational practices of their franchisees. I have no idea how involved they get with employment practices, but it wouldn’t surprise me in the least if they still end up liable under these new (old) rules.

Kudos, BTW, on actually recognizing that this is not a new rule, but a return to an old one. Not all of the news media is willing to say that out loud (I’m lookin’ at you, NPR).

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Cajun2core September 17, 2018 at 6:00 pm

EHRL, Thank you for your reply. That clears things up.

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Maria Rose September 15, 2018 at 1:40 am

Putting the blame back on the individual franchise owners shifts liability for following the local labor laws. The only way that will work is if that franchise owner follows the law properly not just enough to escape being scrutinized. The reason I stated this, is that in franchise ownership the labor costs is the biggest problem for them and they will find the most effective way to cut costs of labor. Take the rising minimum wage for an unskilled job. There’s nothing in the labor laws that deny job elimination of certain jobs utilizing technology like ordering/ by a kiosk instead of dealing with a cashier or robotic cooks.
But dealing with a manager problem in a franchise does limit how an employee can approach making a complaint as it is very similar to a David versus Goliath situation, so the employee better have proof.

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