Coffee News® took its message to Capitol Hill as part of the International Franchise Association’s Franchise Action Network Conference back in September. The three-day Conference brought several franchise brands from around the world to Washington DC to meet with their respective delegations to educate government leaders on the potential effects of recent legislation on the franchise industry as a whole. Bill Buckley, President and CEO of Coffee News®, along with John Buckley, SVP of Franchise Development for Coffee News® both attended the Conference and met with their delegation during the three-day event.
One change involves overtime pay. Under this change, overtime pay must be paid to any staff member that does not earn at least $47,476/year or about twice the current salary level of $23,660/year. The impact of this change will require that any supervisor making less than $47,476 would essentially need to be demoted back to an hourly pay rate thereby discouraging entry-level supervisors from being promoted up the chain in a timely fashion. As a result, businesses open for longer than 40 hours would need to hire additional supervisory staff to cover staffing needs, thus increasing costs of employing additional supervisory staff or pay time and a half for all hours worked over 40 hours in a week. Businesses such as convenience stores and food establishments would either need to cut back on their hours of service and/or increase prices to their existing customers in order to comply with this change. Higher costs, less service. In addition, goods and services may need to be produced outside of the U.S. where they are not subject to our laws. When this change was introduced in New Zealand and Australia two years ago, lower-wage companies were forced to close, consolidate or automate. The result: Less service and job opportunities for those on the edge of the labor force.
The other change called the Joint Employer Ruling states that if a franchisee violates the labor law in hiring or employment, the Franchisor could be held liable and incur penalties as a result since it would be concluded that the Franchisor had indirect or potential control over those employees. The Joint Employer Ruling essentially impacts the franchise business model as a whole since the Franchisor would indirectly be recognized as an employer of its franchisees, as a result.
Meetings with Senator Susan Collins along with Representative Bruce Poliquin were positive and sympathetic to the legislation and its effects on jobs and franchising as a whole. Senator Angus King and Representative Chellie Pingree were unavailable, but meetings conducted with staffers were well received.