Bill Text: IA HF2337 | 2017-2018 | 87th General Assembly | Introduced


Bill Title: A bill for an act relating to franchisor-franchisee relationships for the purposes of certain employment laws and including applicability provisions. (Formerly HSB 559.)

Spectrum: Committee Bill

Status: (Introduced - Dead) 2018-03-15 - Referred to Commerce. H.J. 594. [HF2337 Detail]

Download: Iowa-2017-HF2337-Introduced.html

House File 2337 - Introduced




                                 HOUSE FILE       
                                 BY  COMMITTEE ON COMMERCE

                                 (SUCCESSOR TO HSB 559)

                                      A BILL FOR

  1 An Act relating to franchisor=franchisee relationships for
  2    the purposes of certain employment laws and including
  3    applicability provisions.
  4 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
    TLSB 5478HV (2) 87
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PAG LIN



  1  1    Section 1.  NEW SECTION.  85.55  Franchisor=franchisee
  1  2 relationship.
  1  3    1.  For purposes of this section, franchisee and franchisor
  1  4 mean the same as defined in 16 C.F.R. {436.1.
  1  5    2.  For purposes of this chapter and chapters 86 and 87,
  1  6 a franchisor shall not be considered to be an employer of a
  1  7 franchisee or of an employee of a franchisee unless any of the
  1  8 following conditions apply:
  1  9    a.  The franchisor has agreed in writing to be considered to
  1 10 be the employer of the franchisee or of the employees of the
  1 11 franchisee.
  1 12    b.  The franchisor has been found by the workers'
  1 13 compensation commissioner to have exercised a type or degree of
  1 14 control over the franchisee or the franchisee's employees that
  1 15 is not customarily exercised by a franchisor for the purpose of
  1 16 protecting the franchisor's trademarks and brand.
  1 17    Sec. 2.  NEW SECTION.  91A.15  Franchisor=franchisee
  1 18 relationship.
  1 19    1.  For purposes of this section, franchisee and franchisor
  1 20 mean the same as defined in 16 C.F.R. {436.1.
  1 21    2.  For purposes of this chapter, a franchisor shall not be
  1 22 considered to be an employer of a franchisee or of an employee
  1 23 of a franchisee unless any of the following conditions apply:
  1 24    a.  The franchisor has agreed in writing to be considered to
  1 25 be the employer of the franchisee or of the employees of the
  1 26 franchisee.
  1 27    b.  The franchisor has been found by the commissioner to have
  1 28 exercised a type or degree of control over the franchisee or
  1 29 the franchisee's employees that is not customarily exercised
  1 30 by a franchisor for the purpose of protecting the franchisor's
  1 31 trademarks and brand.
  1 32    Sec. 3.  Section 91D.1, Code 2018, is amended by adding the
  1 33 following new subsection:
  1 34    NEW SUBSECTION.  2A.  a.  For purposes of this subsection,
  1 35 franchisee and franchisor mean the same as defined in 16 C.F.R.
  2  1 {436.1.
  2  2    b.  For purposes of this chapter, a franchisor shall not be
  2  3 considered to be an employer of a franchisee or of an employee
  2  4 of a franchisee unless any of the following conditions apply:
  2  5    (1)  The franchisor has agreed in writing to be considered
  2  6 to be the employer of the franchisee or of the employees of the
  2  7 franchisee.
  2  8    (2)  The franchisor has been found by the labor commissioner
  2  9 to have exercised a type or degree of control over the
  2 10 franchisee or the franchisee's employees that is not
  2 11 customarily exercised by a franchisor for the purpose of
  2 12 protecting the franchisor's trademarks and brand.
  2 13    Sec. 4.  NEW SECTION.  96.36  Franchisor=franchisee
  2 14 relationship.
  2 15    1.  For purposes of this section, franchisee and franchisor
  2 16 mean the same as defined in 16 C.F.R. {436.1.
  2 17    2.  For purposes of this chapter, a franchisor shall not be
  2 18 considered to be an employer of a franchisee or of an employee
  2 19 of a franchisee unless any of the following conditions apply:
  2 20    a.  The franchisor has agreed in writing to be considered to
  2 21 be the employer of the franchisee or of the employees of the
  2 22 franchisee.
  2 23    b.  The franchisor has been found by the department to have
  2 24 exercised a type or degree of control over the franchisee or
  2 25 the franchisee's employees that is not customarily exercised
  2 26 by a franchisor for the purpose of protecting the franchisor's
  2 27 trademarks and brand.
  2 28    Sec. 5.  NEW SECTION.  216.22  Franchisor=franchisee
  2 29 relationship.
  2 30    1.  For purposes of this section, franchisee and franchisor
  2 31 mean the same as defined in 16 C.F.R. {436.1.
  2 32    2.  For purposes of this chapter, a franchisor shall not be
  2 33 considered to be an employer of a franchisee or of an employee
  2 34 of a franchisee unless any of the following conditions apply:
  2 35    a.  The franchisor has agreed in writing to be considered to
  3  1 be the employer of the franchisee or of the employees of the
  3  2 franchisee.
  3  3    b.  The franchisor has been found by the commission to have
  3  4 exercised a type or degree of control over the franchisee or
  3  5 the franchisee's employees that is not customarily exercised
  3  6 by a franchisor for the purpose of protecting the franchisor's
  3  7 trademarks and brand.
  3  8    Sec. 6.  APPLICABILITY.  This Act applies to work performed
  3  9 on or after the effective date of this Act.
  3 10                           EXPLANATION
  3 11 The inclusion of this explanation does not constitute agreement with
  3 12 the explanation's substance by the members of the general assembly.
  3 13    This bill provides that, for the purposes of certain
  3 14 specified employment laws, a franchisor shall not be considered
  3 15 to be an employer of a franchisee or of an employee of a
  3 16 franchisee unless at least one of two specified conditions are
  3 17 met. The first condition is that the franchisor has agreed in
  3 18 writing to be considered to be the employer of the franchisee
  3 19 or of the employees of the franchisee. The second condition
  3 20 is that the franchisor has been found by the governing state
  3 21 agency to have exercised a type or degree of control over
  3 22 the franchisee or the franchisee's employees that is not
  3 23 customarily exercised by a franchisor for the purpose of
  3 24 protecting the franchisor's trademarks and brand.
  3 25    The affected employment laws are Code chapter 216 relating
  3 26 to civil rights, Code chapters 85, 86, and 87 relating to
  3 27 workers' compensation, Code chapter 91A relating to wage
  3 28 payment collection, Code chapter 91D relating to the minimum
  3 29 wage, and Code chapter 96 relating to unemployment insurance.
  3 30    Franchisee is defined by federal regulation as any
  3 31 person who is granted a franchise. Franchisor is defined
  3 32 by federal regulation as any person who grants a franchise
  3 33 and participates in the franchise relationship and includes
  3 34 subfranchisors unless otherwise stated in federal regulations.
  3 35    The bill applies to work performed on or after the effective
  4  1 date of the bill.
       LSB 5478HV (2) 87
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