An important new labor ruling makes corporations responsible for their franchisees’ working conditions. BuzzFeed News speaks with an industry group fighting the new standard and pay hikes.
IFA / Via youtube.com
Addressing a long-debated issue, the National Labor Relations Board today made a ruling in a case favoring a broader definition of "joint employer," a decision that will have major implications for franchise owners and their workers in industries such as fast food and temp staffing.
Previously, franchisees were considered independent businesses, even though they belonged to a large chain, and the corporations that owned the brands said they could not control working conditions at individual franchisees. Thursday's decision makes it easier for unions to organize franchised workplaces and to hold employers responsible for labor conditions, including wages. The defendant in the case may still appeal the decision.
"While Congress is away, the NLRB clearly still plays," said Steve Caldeira, president and CEO of the International Franchise Association, the industry's largest trade group, in a statement following the ruling. "Today's NLRB decision is a seismic shift in the Board's employer definition and, without any Congressional or court action could significantly alter the face of American business as we know it."
As it confronts this new standard, the IFA, which represents franchise businesses large and small, including fast food giants like McDonald's, has also been contending with the "trend that can't be stopped," in the words of one professor of industrial relations — the "tidal wave" of minimum wage raises across the country, implemented by cities, states, private companies, and wage boards.
Backed by the Service Employees International Union, the Fight for 15 campaign has turned raising the minimum wage into an energetic national movement, with many of the planned increases reaching a final rate of $15 an hour, often then indexed to inflation. In New York, Governor Andrew Cuomo's Wage Board recently recommended raising the minimum for the state's fast food workers to $15 by 2021 (and by 2018 in New York City).
Prior to the decision, BuzzFeed News spoke with Caldeira about the joint employer definition and the group's opposition to the minimum wage drive. Here's a condensed and edited transcript of the conversation.
Jeff Roberson / AP
What has the IFA's stance been on the definition of joint-employer by the NLRB?
We've been working aggressively to educate members of Congress on both sides of the aisle to pass legislation to keep the definition of joint-employer before the Board. For decades, through both Democratic and Republican administrations, the NLRB had adhered to this definition of what constitutes a joint employer.
What is your opinion of the New York Wage Board's recent recommendation to raise pay for fast food workers to $15 an hour?
I think it's a blatantly discriminatory social experiment conceived by union bosses and implemented by politicians that are beholden to them. Unions have to find their bacon somewhere, and they're coming after the quick-service restaurant industry.
In me, you've got one focused, passionate CEO that is going to go toe-to-toe, punch-counterpunch against organized labor, Mary Kay Henry and the SEIU, against the blatantly discriminatory actions they are taking. We are up to the battle and we will continue to fight with all the energy that we can muster to do what's right and to protect small business franchise owners.
What would you say to supporters of the wage increase, who claim that workers can't live on the current wages in the fast food sector?
The minimum wage was never meant to be a living wage. It was meant for entry-level workers — first jobs on the employment ladder, for lesser-skilled positions. A starting point, an entry point.
Today's workers aren't teens working for gas money. Almost 40% of fast food workers are 25 or older. More than a quarter of them have children.
Why are more people working in quick-service industry? Because they can't get the jobs they want.
If you've got workers who are older working in quick-service restaurants, that tells you there is a fundamental problem with the policies that are emanating from Washington. If they could find the jobs they wanted, they'd be in them. But they can't. So they get the jobs where they can.
It's not the quick-service restaurant industry's fault that the U.S. economy went south. The real culprit is six years of ineffective progressive economic policies that have really impacted the small business community. It's due to a lack of a pro-growth economic agenda. You've got small business owners dealing with the Affordable Care Act, which is anything but affordable. Capital is much tougher to get.
So all of a sudden the quick-service restaurant industry is responsible for providing middle-income jobs. We were supposed to be America's training force. We provide training opportunities for veterans, minorities, and women. Franchisees want to take care of their workers, but to go from $8.75 to $15 is to blatantly discriminate against franchisees. That's why we're suing Seattle.
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