Proos’ bill signed into law will protect local small businesses

Senator John Proos

Senator John Proos

LANSING, Mich. — The governor recently signed legislation sponsored by Sen. John Proos to protect the long-standing relationship between franchise owners and their employees.

“Local franchise owners, risk their own money to offer opportunities and jobs for people in their communities and to achieve the American dream of owning their own business,” said Proos, R-St. Joseph. “The franchise business model has been a tremendous success in America and in Michigan. More than 260,000 people work at more than 24,000 franchises in our state.

“I have gotten to know many small business owners. They are proud members of our community who often help local nonprofit organizations, sponsor youth sports teams and give young people their first jobs. We should be supporting these entrepreneurs, not undercutting them.”

Recently, federal officials in Washington upended decades-long established law concerning the employee-employer relationship under the franchise business model.

Proos’ bill, Senate Bill 493, and a companion measure, SB 492, put into state law the standard that an employee at a local franchise is only an employee of that franchise owner and not an employee of the parent company, such as McDonald’s.

Under the new acts, a local franchise owner  is the sole employer of its workers unless the franchise owner and parent company share in determining terms and conditions of employment and both “directly and immediately control” the employment relationship.

“We must protect our economy from a federal overreach that would consider parent franchise companies, like Michigan-based Little Caesars, to be an employer of a worker — regardless of whether they share the ability to hire, fire or supervise that worker,” Proos said. “Local franchise owners are the ones hiring and overseeing their workers and paying their salaries. It makes no sense that these workers be considered employees of anyone other than the franchise owner.

“The fact that these new laws are necessary speaks loudly to the current administration in Washington’s stance on local economies like ours in Southwest Michigan.”


Editor’s note: Audio comments by Proos will be available later on the senator’s website at Click on “Audio” under the Media Center tab.