HB 1644 — Summary (Creates new provisions relating to joint employers)
Status and basic info
- Bill number: HB 1644
- Title/Topic: Creates new provisions relating to joint employers (franchise context)
- Filed/Introduced: Prefiled (H); introduced December 17, 2024
- Primary sponsors: Rep. Dalby; Sen. A. Clark (listed as primary)
- Related: SB 362 and SB 540 (companions)
Purpose and intent
- Establish a state-law standard limiting when a franchisor can be treated as a joint employer of a franchisee’s employees. The bill seeks to make clear that franchisors are not automatically liable as employers of franchisee employees unless they exercise very specific, direct control.
Key provisions (plain language)
- New statutory section (proposed § 285.075) provides:
- “Notwithstanding any voluntary agreement entered into between the United States Department of Labor and a franchisee or a franchisor, neither a franchisee nor a franchisee’s employee shall be deemed to be an employee of the franchisor for any purpose, unless the franchisor exercises direct and immediate control over the hiring, termination, discipline, and direction of the franchisee’s employees.”
- Defines “franchisee” and “franchisor” by reference to 16 C.F.R. § 436.1 (federal franchise definitions).
Who would be affected
- Primary: franchisors and franchisees operating in the state; franchisee employees.
- Secondary: employers who use franchise-like business models, contractors, labor law enforcers, courts, and agencies applying state employment, wage/hour, unemployment, workers’ compensation, and labor-relations rules.
- Labor advocates, unions, and employee-plaintiffs may see reduced avenues to hold franchisors jointly liable under state law unless the narrow control test is met.
Practical effect and likely impacts
- Establishes a bright-line, control-focused standard for determining joint-employer status at the state level: franchisor liability occurs only if it exercises “direct and immediate” control over hiring, firing, discipline, and direction of the franchisee’s employees.
- Would generally limit franchisors’ exposure to legal and administrative claims (wage-and-hour, retaliation, unemployment/wage claims, certain labor obligations) arising from the acts of franchisees, unless the franchisor exercises the specified direct control.
- Could create divergence between state determinations and federal agency standards (e.g., DOL or NLRB) that use broader multi-factor tests; the bill explicitly displaces voluntary agreements with the U.S. DOL in this context.
- May influence franchising contracts, business practices, and the supervision/franchisee oversight franchisors choose to exercise.
Procedural/timeline notes
- Current status: Prefiled (lower chamber) as of Dec 17, 2024 (per provided info). No effective date or enacted status shown in the provided document. Related companion bills exist in the legislature (SB 362, SB 540). Sponsors and committee referrals may affect schedule; stakeholders should monitor committee assignments, hearings, and any amendments.
Limitations and uncertainties
- The bill’s reach is limited to the statutory language provided; it does not itself define other employer-relationship tests or address all potential liability schemes (e.g., tort claims).
- Interaction with federal law and federal administrative determinations could lead to legal disputes about preemption or conflicting standards.
- Practical application will depend on how courts and enforcement agencies interpret “direct and immediate control” in varied workplace contexts.
If you want, I can:
- Draft a short explainer chart comparing current joint-employer tests (federal NLRB/DOL) vs. the bill’s test; or
- Flag likely stakeholders and typical amendment language used in other states for similar bills.
