(p. B4) Small-business owners say they are shouldering higher costs and scaling back expansion plans because of a revised federal rule that gives employees more leverage in settling workplace grievances.
The new policy, intended to hold businesses accountable for labor-law violations against people whose working conditions they control but don’t claim as employees, was put in place last year through a ruling by the National Labor Relations Board, . . .
. . .
Businesses say they are in a regulatory limbo because the new standard is vague about what constitutes control.
The previous test measured the direct control one business had over working conditions of people employed by another business. Now, even indirect control can count.
So far the impact seems to be largely on the franchisees. A home health-care business in Wisconsin is taking on $10,000 in annual recruiting costs because its franchiser stopped providing assistance to steer clear of regulators, and a small hotelier in Florida is abandoning expansion plans in small markets because one of its franchisers scaled back worker training it provides. A printing business owner in Washington state said he canceled plans to open an eighth store because he doesn’t want to risk the investment until it is clear his franchiser wouldn’t be considered a joint-employer.
“I could lose my ability to control my business,” said Chuck Stempler, an owner of the seven printing stores that operate under the AlphaGraphics brand in Washington and California.
. . .
Employers say the NLRB is confusing control with contractual relationships that help businesses and workers thrive.
“The NLRB is applying a new legal standard that would undermine a successful American business model that has enabled thousands of families to operate their own small businesses and help support millions of American jobs,” McDonald’s said in a statement, referring to the franchising business.
For the full story, see:
MELANIE TROTTMAN. “New Labor Law Curbs Small Firms’ Plans.” The Wall Street Journal (Sat., Aug. 6, 2016): B4.
(Note: ellipses added.)
(Note: the online version of the story has the date Aug. 5, 2016, and has the title “Some Small-Business Owners Trim Expansion Plans, Cite New Labor Law.”)