The recent National Labor Relations Board (NLRB) ruling, that McDonald’s is considered to be a co-employer along with the owner of a franchise, continues to send shockwaves in the fast-food sector of the economy.
As one example, California is expected to pass S.B. 610, called the California Franchise Relations Act, which will bolster the rights of franchise owners and give them the freedom to pay their workers a living wage without facing the ire of their corporate parents.
In “The New Law Both Fast-Food Workers and Franchise Owners Love,” Willy Blackmore, Food editor for TakePart.com, notes that many franchise owners hate fast-food corporations nearly as much as their low-wage employees do. In his report, Blackmore writes about McDonald’s franchisee Kathryn Carter, who told the California branch of the Service Employees International Union (SEIU), “Corporate headquarters control nearly every aspect of our business—we can be punished for speaking out or joining with other franchise owners to improve business conditions.”
As the only full-service point of sale provider — from software development to franchise incubator to ongoing support — part of Sintel’s commitment to our customers and business community is to share relevant ideas, information and industry news.
In its support of the bill, SEIU believes the law will lead to increased wages for California’s fast-food workers. Currently, in California, many fast-food workers earn the state minimum wage of $9.00/hour. “While that’s better than the federal minimum wage, $7.25, the cost of living can be exceptionally high in the state: A recent study from UCLA found that Los Angeles has the least-affordable rental market in the country, for example,” writes Blackmore.
In March, class action lawsuits were filed against McDonald’s in three states wherein former and then-current employees alleged that the parent company was intimately involved in a scheme to tightly control labor costs that they said amounted to systematic wage theft.
“It’s our understanding that both the managers and McDonald’s monitor what percentage of overall sales go to labor at any point in time,” B.J. Chrisholm, an attorney working on the California class action lawsuit, told Blackmore at the time. “It’s really the sort of obsession with keeping that labor number low that results in a lot of the practices that we’re seeing in the restaurants.”
Blackmore closes by writing, “If the state gives franchise owners increased independence, practices like that could be a thing of the past in California.”
Read the full TakePart.com post here.
For more insights into the dynamics between franchises, franchisees and labor, check out our related posts, Seattle’s Fast Tracked Franchisees Are Fit To Be Tied, Private Sector Job Growth Fueled By Franchises, and NRLB: McDonald’s, Franchisees Are Co-Employers.
As the only full-service provider — from software development to franchise incubator to ongoing support — part of Sintel’s commitment to our customers and industry is to share ideas and information. Whether you’re a first-time franchise hopeful, a small business owner or an established chain, it’s always smart to stay on top of the latest news in labor issues to achieve financial success.
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