With 61 percent of hotels considered small businesses, the hotel industry has thrived by fostering opportunities for small business owners around the country to open their own hotels thanks to the franchise model. This ability has allowed so many in our industry to achieve the American Dream.
For more than three decades, the joint employer standard has been one of the cornerstones of labor law, protecting small businesses from undue liability involving employees over which they do not have actual or direct control. Unfortunately, in August 2015, the National Labor Relations Board (NLRB) issued its decision in the Browning-Ferris Industries of California (BFI) case and created a new “joint employer” standard under federal labor law.
Changes to this model could severely disrupt the pathway to success and hurt franchisors and franchisees alike. The new standard makes employers potentially liable for actions and activities of employees that they do not employ and it could jeopardize business to business contractual relationships.