Business owners have been given a renewed sense of optimism that the current Trump administration will do whatever it takes to promote the interests of the franchise industry in the United States. The pro-business White House is now pressing the interests of the franchise industry throughout the world and particularly in Australia. The United States and Australia are at odds over a bill being purported by the new Austrailian Turnbull government that protects immigrant workers from being the victim of wage fraud and immigration visa abuse. US Vice President Mike Pence is expected to represent the US franchise industry’s concern over Turnbull’s “Protecting Vulnerable Workers Bill” which could increase the penalties and hold Australian franchisors jointly responsible if the franchisor is found to exercise significant influence or control over the hiring, training, and day-to-day management practices of the franchisee’s employees. The US White House has expressed concern to the Australian ambassador from the US, Joe Hockey, that the bill unfairly targets the franchise industry. In addition, the NLRB withdrew its 2015 guidance and broadened the definition of independent contractor. By designating a worker an independent contractor, and not an employee, the franchisee can skirt local minimum wage and overtime rules as well as other employee legal protections. In a recent precedent-setting decision, a California court found franchise giant McDonald’s was not a “joint-employer” and thus not responsible for the potential wage fraud abuse its franchisees.

During the Obama administration, the National Labor Relations Board (NLRB) proposed expanding the definition of “joint employer” which would hold franchisor corporations responsible for the illegal employee-related actions of the franchisee. The expansion of the definition has been rescinded by the executive order of the Trump White House as being excessively burdensome on the franchise industry and could thwart business expansion and job creation. The Trump administration has voiced its concern to the Australian government that the bill should be reworded to reflect the franchise model concept of franchise independence in making employee hiring and management.

Franchise giants such as 7-Eleven, Caltex, and Dominos Pizza have all conceded that there is widespread wage fraud within their respective companies in the form of franchisees forcing their employees to kick back cash payments as a condition of their employment. At all three of the franchise companies immigrant employees have been threatened with deportation and some franchise owners have even threatened to harm the employee’s families back in their country of origin should the employee not comply with the cash kick-back scheme. Immigrant employees very often take low-wage, unskilled jobs in the fast food and convenience store franchise industry in order to stay in their new country and to scratch out a living. These workers are particularly vulnerable to fraudulent employer underpayment of wages. Interestingly, the employer is often an immigrant themself.

Sources: http://www.afr.com/business/bruce-billson-warns-joe-hockey-about-potential-us-concerns-for-turnbulls-new-franchise-laws-20170709-gx7n0c

http://billmoyers.com/story/big-business-cheers-rollback-on-labor-rule/