Wisconsin Law Protects Franchisors from Joint Employment

In what is likely a reaction to efforts to consider franchisors joint employers of franchisee employees, Wisconsin enacted S.B. 422 which pushes back against expansive joint employment tests.

Wisconsin Governor Scott Walker (R) signed S.B. 422 into law on March 1, 2016. The new law provides that for purposes of worker’s compensation, unemployment insurance, employment discrimination, minimum wage, and wage payments purposes, a franchisor is not considered to be an employer of a franchisee or of an employee of a franchisee unless any of the following applies:

  1. The franchisor has agreed in writing to assume that role.
  2. The franchisor has been found to have exercised a type or degree of control over the franchisee or the franchisee’s employees that is not customarily exercised  by a franchisor for the purpose of protecting the franchisor’s trademarks and brand.

It is important to note that this new law is only applicable for purposes of Wisconsin state law and does not control decisions by federal agencies.

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