It may no longer be Halloween, but it is still a frightening time to be an independent contractor or a franchisee. The Biden administration recently unveiled two new proposed rules which jeopardize the independent contractor and franchise models. As usual, the president wants to satisfy the progressive policy demands of Big Labor and to push as many workers as possible into unions, regardless of their preference. This is all trick and no treat.
In Case You Missed It via The Hill, the Biden administration’s new joint-employer and independent contractor rules will put major roadblocks in the way of workers and small business owners, all to appease Big Labor.
A fearful October for entrepreneurs
By F. Vincent Vernuccio and Steve Delie
October 29, 2022
…[W]orkers and business owners now need to prepare for two regulations from the Biden administration that will attack their ability to earn a living, own a business, or make extra cash.
The National Labor Relations Board (NLRB) is coming after the almost 800,000 franchise owners who employ 8.5 million people. The board’s proposed “Joint Employer” rule, would have catastrophic effects on the franchise industry and restrict the opportunities of small business owners who are franchisees.
The NLRB rule would force franchisors — distant corporate headquarters — to come between franchisees and their employees. … Franchisors would become jointly liable for employment issues involving workers or contractors who are employed or “directly controlled” (as the current standard notes) by a small business.
Under the proposal, the definition of “employer” would change. Franchisors, who do not currently have direct control of people working at a franchisee (their pay, hours, benefits, etc.) would face a very different environment with increased liability for employment issues. The new rule could change owners of the small business franchisees into managers for distant corporations, costing the owners income and opportunity as some corporations would want to take direct control of the employees to avoid potential liability.
That would be bad enough. But, on Oct. 13, the Department of Labor released its notice of proposed rulemaking that would harm many people who choose to be independent contractors.
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Regardless of how the test is framed, the Biden administration has shown time and again that it favors categorizing workers as employees, even if they would rather be self-employed.
The proposed rules do benefit one group: unions. If a franchisor is deemed a joint employer, unions would be able to organize against the franchisor, rather than individual franchises. This would streamline unionizing efforts. If the Labor rule were enacted and independent workers are reclassified as employees, then unions can organize them. This change would have the greatest impact on people in one of the 23 states that do not have a right-to-work law. These individuals, currently independent contractors, could be forced to pay dues or lose their jobs.
These two rules would make it harder for workers to work for themselves or own a small business through a franchise.
Read the full op-ed here.
Original source can be found here.
