Small companies employ 61 million people in the United States; they are the backbone of the economy. However, not every small firm has its own brand identity.
Numerous franchisees operate independently under the banner of a bigger firm. Over 750,000 small businesses are supported by the franchise system in the United States.
This includes businesses like eateries and gyms, as well as businesses like moving companies, cleaning companies, and hardware stores.
Franchising and Safeguards
The legislation recently proposed by the federal government would help protect this ecosystem of small businesses from regulations that could make them less free.
The Employee Rights Act of 2022, recently sponsored by South Carolina Senator Tim Scott, clarifies the Labor Department’s “dual employer” criterion, allowing franchisers to continue partnering with entrepreneurs in local areas.
Indeed, while franchisees may work under the banner of a larger parent company, such as McDonald’s, they are primarily responsible for employing staff, distributing salaries, arranging hours, and other standard business functions.
A government interpretation of “joint employer” that is too broad would strangle parent businesses’ relationships with independent franchisees, essentially shutting down the old franchise system.
Without the act’s clarification, the chance for so many would-be entrepreneurs to manage their enterprises and pursue the American dream would be lost.
Passing the Employee Rights Act will help empower entrepreneurs and protect workers at the same time, writes @JobCreatorsUSA's Alfredo Ortiz
"The rest of Congress should follow Sen. Scott’s lead."
— Washington Examiner (@dcexaminer) March 31, 2022
Apart from bolstering franchised small companies, the measure includes provisions that update rules governing the gig economy and safeguard employees against rogue actors inside labor unions.
Currently, gig economy businesses are restricted in terms of the perks (such as medical insurance) they may give independent contractors versus full-time workers.
Consider the drivers of Lyft, DoorDash delivery personnel, or personal shoppers. The legislation would provide these benefits to gig workers without impairing their ability to choose when, where, and how much to work.
For workers in more conventional jobs, the legislation ensures that votes to join a union are conducted in secret polls within the workplace.
At the moment, the alternative is referred to as “card check,” which exposes staff to intimidation methods that might sway decision-making. Beyond elections for political office, voter integrity should be a concern.
Additionally, the measure strengthens worker privacy safeguards, criminalizes union leaders’ pressure or threats, and requires union members’ approval before a percentage of their income is utilized for purposes other than collective bargaining.
Since 2010, when 40% of union families voted Republican, unions have spent upwards of $1.6 billion (almost all of their political expenditures) to help left-wing special interest groups.
#EmployeeRightsAct puts workers at the center of labor law. The Employee Rights Act doesn't see union membership and employee freedom as an either/or proposition. The #PROAct does. https://t.co/KHQ5TgiiUY
— NanNan (@Karen49434003) March 27, 2022
By and large, essential aspects of the legislation enjoy widespread public support.
Almost two-thirds say franchisees should keep control over their personnel. Approximately the same percentage believe that those who work gigs should have access to employment benefits without jeopardizing their job flexibility.
Furthermore, 76 percent of union households believe that all workers should have access to a secret balloting when choosing whether or not to join the union.
As small companies battle inflation, supply chain interruptions, and labor shortages, Main Street needs all the assistance it can get.
Adopting the Employee Rights Act will assist entrepreneurs while also protecting employees. The rest of Congress should follow Scott’s example.