Last month, the North Carolina State Assembly voted 109-0 to pass SB 303, which mandates that a franchisor is not the employer of a franchisee or a franchisee's employees. The legislation now moves to the North Carolina Senate for consideration. This follows the actions of many other states to provide clarity under state law as to what is an employee in a franchised business located in their state. For more information on these efforts, please see my blog of December 31, 2015: "More States Moving to Limit Fallout from Browning Ferris".
The new provision is quite simple and states: "Neither a franchisee nor a franchisee's employee shall be deemed to be an employee of the franchisor for any purposes, including, but not limited to, this Article and Chapters 96 and 97 of the General Statutes. For purposes of this section, "franchisee" and "franchisor" have the same definitions as set out in 16 C.F.R. 436.1." So, if an entity is a franchisor or franchisee under Federal law, neither the franchisee nor the franchisee's employee shall be deemed an employee under North Carolina law. Please note that this will not affect any determination of "joint employment" under Federal law.
And the story continues...
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