BILL NUMBER: S7289
SPONSOR: BRISPORT
 
TITLE OF BILL:
An act to amend the labor law, in relation to establishing the New York
state fast food franchisor accountability act
 
SUMMARY OF PROVISIONS:
Section one sets forth the title of the bill as the "New York State fast
food franchisor accountability act."
Section two adds new article 35 to the New York State labor law, provid-
ing joint and several liability for fast food franchisors for certain
labor law violations.
Section three provides that this act shall take effect immediately.
 
JUSTIFICATION:
This bill would enact the "New York State Fast Food Franchisor Account-
ability Act," in order to protect fast food workers from certain labor
violations.
According to the Bureau of Labor Statistics,, more than 150,000 New
Yorkers work in the fast food industry, with an average wage of just
fifteen dollars per hour. Those workers in turn face poor working condi-
tions and routine violations of employment law. Franchise companies
wield large concentrations of market power within this sector, contract-
ing out day-to-day supervision but maintaining extensive operational
control. They effectively set the terms of employment, with little
incentive to deter future violations of workplace law or to ensure that
their own policies do not cause them. Franchise owners are sometimes
explicitly told to pay their workers less to maintain profitability in
the face of franchisors' mandatory pricing, or are forced to discipline
employees for fear of contractual default. It is hardly surprising that
franchise owners respond to such conditions of intensive surveillance
and narrow profit margins by unlawfully chiseling wages and squeezing
workers, the primary cost variable under their control. When violations
inevitably occur, the franchise owners cannot afford full restitution,
while the franchise companies that are ultimately responsible cannot be
held liable due to New York's legal structure that allows them to escape
liability.
For example, the New York Office of the Attorney General has investi-
gated complaints of wage theft violations at over seventy Domino's Pizza
locations over the last decade, resulting in numerous class-action
lawsuits and dozens of settlements with individual franchise locations--
in some cases settlements over one million dollars that bankrupt fran-
chise owners -- while the Domino's parent company has consistently
escaped joint-employer liability.
This bill would hold fast food restaurant franchisors responsible for
ensuring that their franchisees comply with employment laws and worker
protections, including those related to employment discrimination, and a
range of labor regulations and emergency orders. This bill would also
require that a fast food restaurant franchisor take responsibility for
ensuring compliance by its franchises, and be jointly and severally
liable for ensuing violations, as specified, and would provide that
specified laws may be enforced against a fast food restaurant franchisor
to the same extent that they may be enforced against a franchisee.
 
PRIOR LEGISLATIVE HISTORY:
2023-24: S3155
 
FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS:
To be determined.
 
EFFECTIVE DATE:
This act shall take effect immediately.