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Georgia law changes franchisor-franchisee relationship

BY Diane Cadrain

A new Georgia law effective July 1 provides that people who are parties to franchise agreements are not to be considered employees for purposes of workers’ compensation benefits. The legislation essentially protects franchisors from comp claims by franchisees.

The new law covers individuals “who are parties to a franchise agreement as set out by the Federal Trade Commission franchise disclosure rule, and deems that the relationship between franchisors and franchisees is governed by the rules of contract law, not those of employment law.

The International Franchise Association (IFA), which backed the bill, said it was the first such legislation in the nation.

“We applaud Georgia legislators for being the first state to formally recognize that the franchisee/franchisor relationship represents a contractual business relationship, not an employment relationship,” said IFA Senior Vice President of Government Relations & Public Policy Judith Thorman. “As a result of this law, franchising will continue to thrive as a growing economic force in the Georgia economy across many business lines including restaurants, hotels, automotive, health care, business and personal services, and real estate, among other business sectors.”

The law comes on the heels of closely watched litigation involving franchisors and franchisees in other states. In Massachusetts, for example, a court ordered a janitorial franchise called Coverall to pay $3 million in franchise fees to 100 people, mostly immigrants, whom it misclassified as franchisees.  

Coverall issued a statement that it “still believes its franchised owners are independent business owners and not employees; as such, they operate their commercial cleaning service businesses, maintaining accounts and hiring independently.”

Diane Cadrain is an attorney who has been writing about employment law issues for more than 20 years.

Have HR-related questions and concerns? Get access to essential forms, policies and guides, plus a live call center, at ToolkitHR.com, powered by HCN and the Society for Human Resource Management (SHRM).

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‘The State of the Nation’s Housing’ reveals complicated picture

BY Ken Clark

The State of the Nation’s Housing is, in a word, complicated.

Housing markets are showing signs of reviving, concluded "The State of the Nation’s Housing" report released by the Cambridge, Mass.-based Joint Center for Housing Studies of Harvard University. But we’re not out of the woods, yet. 

“While still in the early innings of a housing recovery, rental markets have turned the corner, home sales are strengthening, and a floor is beginning to form under home prices,” said Eric Belsky, managing director of the Joint Center for Housing Studies.  “With new-home inventories at record lows, unless the broader economy goes into a tailspin, stronger sales should further stabilize prices and pave the way for a pickup in single-family housing construction over the course of 2012.” 

Rental markets are on the mend thanks to sharp drops in construction and an increase of over 4.4 million renters since 2005.  Rental vacancy rates are falling, rents are increasing, and multi-family construction is up solidly. In contrast, the nation’s homeownership rate continues to slide.

“Surveys consistently find that the overwhelming majority of young adults plan to own a home in the future, but many would-be buyers have stayed on the sidelines waiting for the job outlook to improve and house prices to stop falling,” Belsky said.  “But as markets tighten, these fence-sitters may begin to take advantage of today’s lower home prices and unusually low mortgage rates. With rents up, home prices sharply down, and mortgage interest rates at record lows, monthly mortgage costs relative to monthly rents haven’t been this favorable since the early 1970s.”

Chief among the statistical analysis running through the report is the idea that owner-occupied market is seeing signs of recovery. Sales of newly constructed homes in the first quarter of 2012 were up 16.7% from the previous year — this after a record low of just 306,000 in 2011.

In 1990, the NAR Affordability Index stood at 108.1. In 2011, it jumped up to 186.1.

The report also points to headwinds:

• Upwards of 2.0 million homes are in some stage of foreclosure in early 2012;
• Real net household wealth fell $14.3 trillion from 2006 to 2011, dragged down by a 57% drop in housing wealth; and
• 33% of the National Association of Realtors’ member brokers reported contract failures in December 2011, compared with just 9% a year earlier. 

The 40-page report covers the yin and yang of home prices and housing affordability, and cautions that the homeowner market faces numerous challenges. The report begins with the sentence: “After several false starts, there is reason to believe that 2012 will mark the beginning of a true housing market recovery.”

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UL Environment certifies first refrigerator

BY Brae Canlen

UL Environment, a business unit of UL (Underwriters Laboratories), has announced that appliance manufacturer Whirlpool Corp. has become the first company in the marketplace to achieve certification of its products to the new AHAM-CSA-UL sustainability standard for household refrigeration appliances.

Developed collaboratively by UL Environment, the Association of Home Appliances Manufacturers and the Canadian Standards Association, this new sustainability standard requires that refrigerators meet lifecycle-based environmental performance criteria across five categories: materials, energy consumption during use, manufacturing and operations, product performance, and end of life. The first refrigeration products to meet these criteria and achieve UL Environment certification to the standard are Whirlpool Corp.’s French door-style, bottom-mount household refrigerators.

"We are confident that Whirlpool Corp.’s forthcoming certification will set the stage for other refrigerator manufacturers to follow suit, spurring positive transformation toward environmental stewardship across the home appliances industry," said Sara Greenstein, president of UL Environment, in a prepared statement. 

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