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House File 327 - IntroducedA Bill ForAn Act 1relating to franchisor-franchisee relationships for
2the purposes of certain employment laws and including
3applicability provisions.
4BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
1 Section 1. NEW SECTION. 85.55 Franchisor-franchisee
2relationship.
31. For purposes of this section, franchisee and franchisor
4mean the same as defined in section 523H.1.
52. For purposes of this chapter and chapters 86 and 87,
6a franchisor shall not be considered to be an employer of a
7franchisee or of an employee of a franchisee unless any of the
8following conditions apply:
9a. The franchisor has agreed in writing to be considered to
10be the employer of the franchisee or of the employees of the
11franchisee.
12b. The franchisor has been found by the workers’
13compensation commissioner to have exercised a type or degree of
14control over the franchisee or the franchisee’s employees that
15is not customarily exercised by a franchisor for the purpose of
16protecting the franchisor’s trademarks and brand.
17 Sec. 2. NEW SECTION. 91A.15 Franchisor-franchisee
18relationship.
191. For purposes of this section, franchisee and franchisor
20mean the same as defined in section 523H.1.
212. For purposes of this chapter, a franchisor shall not be
22considered to be an employer of a franchisee or of an employee
23of a franchisee unless any of the following conditions apply:
24a. The franchisor has agreed in writing to be considered to
25be the employer of the franchisee or of the employees of the
26franchisee.
27b. The franchisor has been found by the commissioner to have
28exercised a type or degree of control over the franchisee or
29the franchisee’s employees that is not customarily exercised
30by a franchisor for the purpose of protecting the franchisor’s
31trademarks and brand.
32 Sec. 3. Section 91D.1, Code 2019, is amended by adding the
33following new subsection:
34 NEW SUBSECTION. 2A. a. For purposes of this subsection,
35franchisee and franchisor mean the same as defined in section
-1-1523H.1.
2b. For purposes of this chapter, a franchisor shall not be
3considered to be an employer of a franchisee or of an employee
4of a franchisee unless any of the following conditions apply:
5(1) The franchisor has agreed in writing to be considered
6to be the employer of the franchisee or of the employees of the
7franchisee.
8(2) The franchisor has been found by the labor commissioner
9to have exercised a type or degree of control over the
10franchisee or the franchisee’s employees that is not
11customarily exercised by a franchisor for the purpose of
12protecting the franchisor’s trademarks and brand.
13 Sec. 4. NEW SECTION. 96.36 Franchisor-franchisee
14relationship.
151. For purposes of this section, franchisee and franchisor
16mean the same as defined in section 523H.1.
172. For purposes of this chapter, a franchisor shall not be
18considered to be an employer of a franchisee or of an employee
19of a franchisee unless any of the following conditions apply:
20a. The franchisor has agreed in writing to be considered to
21be the employer of the franchisee or of the employees of the
22franchisee.
23b. The franchisor has been found by the department to have
24exercised a type or degree of control over the franchisee or
25the franchisee’s employees that is not customarily exercised
26by a franchisor for the purpose of protecting the franchisor’s
27trademarks and brand.
28 Sec. 5. NEW SECTION. 216.22 Franchisor-franchisee
29relationship.
301. For purposes of this section, franchisee and franchisor
31mean the same as defined in section 523H.1.
322. For purposes of this chapter, a franchisor shall not be
33considered to be an employer of a franchisee or of an employee
34of a franchisee unless any of the following conditions apply:
35a. The franchisor has agreed in writing to be considered to
-2-1be the employer of the franchisee or of the employees of the
2franchisee.
3b. The franchisor has been found by the commission to have
4exercised a type or degree of control over the franchisee or
5the franchisee’s employees that is not customarily exercised
6by a franchisor for the purpose of protecting the franchisor’s
7trademarks and brand.
8 Sec. 6. APPLICABILITY. This Act applies to work performed
9on or after the effective date of this Act.
10EXPLANATION
11The inclusion of this explanation does not constitute agreement with
12the explanation’s substance by the members of the general assembly.
13This bill provides that, for the purposes of certain
14specified employment laws, a franchisor shall not be considered
15to be an employer of a franchisee or of an employee of a
16franchisee unless at least one of two specified conditions are
17met. The first condition is that the franchisor has agreed in
18writing to be considered to be the employer of the franchisee
19or of the employees of the franchisee. The second condition
20is that the franchisor has been found by the governing state
21agency to have exercised a type or degree of control over
22the franchisee or the franchisee’s employees that is not
23customarily exercised by a franchisor for the purpose of
24protecting the franchisor’s trademarks and brand.
25The affected employment laws are Code chapter 216 relating
26to civil rights, Code chapters 85, 86, and 87 relating to
27workers’ compensation, Code chapter 91A relating to wage
28payment collection, Code chapter 91D relating to the minimum
29wage, and Code chapter 96 relating to unemployment insurance.
30Franchisee is defined under Iowa law as a person to whom a
31franchise is granted, including a subfranchisor with regard to
32its relationship with a franchisor and a subfranchisee with
33regard to its relationship with a subfranchisor. Franchisor
34is defined under Iowa law as a person who grants a franchise or
35master franchise, or an affiliate of such a person, including
-3-1a subfranchisor with regard to its relationship with a
2franchisee, except as otherwise provided by state law.
3The bill applies to work performed on or after the effective
4date of the bill.
-4-je/rn
2the purposes of certain employment laws and including
3applicability provisions.
4BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
1 Section 1. NEW SECTION. 85.55 Franchisor-franchisee
2relationship.
31. For purposes of this section, franchisee and franchisor
4mean the same as defined in section 523H.1.
52. For purposes of this chapter and chapters 86 and 87,
6a franchisor shall not be considered to be an employer of a
7franchisee or of an employee of a franchisee unless any of the
8following conditions apply:
9a. The franchisor has agreed in writing to be considered to
10be the employer of the franchisee or of the employees of the
11franchisee.
12b. The franchisor has been found by the workers’
13compensation commissioner to have exercised a type or degree of
14control over the franchisee or the franchisee’s employees that
15is not customarily exercised by a franchisor for the purpose of
16protecting the franchisor’s trademarks and brand.
17 Sec. 2. NEW SECTION. 91A.15 Franchisor-franchisee
18relationship.
191. For purposes of this section, franchisee and franchisor
20mean the same as defined in section 523H.1.
212. For purposes of this chapter, a franchisor shall not be
22considered to be an employer of a franchisee or of an employee
23of a franchisee unless any of the following conditions apply:
24a. The franchisor has agreed in writing to be considered to
25be the employer of the franchisee or of the employees of the
26franchisee.
27b. The franchisor has been found by the commissioner to have
28exercised a type or degree of control over the franchisee or
29the franchisee’s employees that is not customarily exercised
30by a franchisor for the purpose of protecting the franchisor’s
31trademarks and brand.
32 Sec. 3. Section 91D.1, Code 2019, is amended by adding the
33following new subsection:
34 NEW SUBSECTION. 2A. a. For purposes of this subsection,
35franchisee and franchisor mean the same as defined in section
-1-1523H.1.
2b. For purposes of this chapter, a franchisor shall not be
3considered to be an employer of a franchisee or of an employee
4of a franchisee unless any of the following conditions apply:
5(1) The franchisor has agreed in writing to be considered
6to be the employer of the franchisee or of the employees of the
7franchisee.
8(2) The franchisor has been found by the labor commissioner
9to have exercised a type or degree of control over the
10franchisee or the franchisee’s employees that is not
11customarily exercised by a franchisor for the purpose of
12protecting the franchisor’s trademarks and brand.
13 Sec. 4. NEW SECTION. 96.36 Franchisor-franchisee
14relationship.
151. For purposes of this section, franchisee and franchisor
16mean the same as defined in section 523H.1.
172. For purposes of this chapter, a franchisor shall not be
18considered to be an employer of a franchisee or of an employee
19of a franchisee unless any of the following conditions apply:
20a. The franchisor has agreed in writing to be considered to
21be the employer of the franchisee or of the employees of the
22franchisee.
23b. The franchisor has been found by the department to have
24exercised a type or degree of control over the franchisee or
25the franchisee’s employees that is not customarily exercised
26by a franchisor for the purpose of protecting the franchisor’s
27trademarks and brand.
28 Sec. 5. NEW SECTION. 216.22 Franchisor-franchisee
29relationship.
301. For purposes of this section, franchisee and franchisor
31mean the same as defined in section 523H.1.
322. For purposes of this chapter, a franchisor shall not be
33considered to be an employer of a franchisee or of an employee
34of a franchisee unless any of the following conditions apply:
35a. The franchisor has agreed in writing to be considered to
-2-1be the employer of the franchisee or of the employees of the
2franchisee.
3b. The franchisor has been found by the commission to have
4exercised a type or degree of control over the franchisee or
5the franchisee’s employees that is not customarily exercised
6by a franchisor for the purpose of protecting the franchisor’s
7trademarks and brand.
8 Sec. 6. APPLICABILITY. This Act applies to work performed
9on or after the effective date of this Act.
10EXPLANATION
11The inclusion of this explanation does not constitute agreement with
12the explanation’s substance by the members of the general assembly.
13This bill provides that, for the purposes of certain
14specified employment laws, a franchisor shall not be considered
15to be an employer of a franchisee or of an employee of a
16franchisee unless at least one of two specified conditions are
17met. The first condition is that the franchisor has agreed in
18writing to be considered to be the employer of the franchisee
19or of the employees of the franchisee. The second condition
20is that the franchisor has been found by the governing state
21agency to have exercised a type or degree of control over
22the franchisee or the franchisee’s employees that is not
23customarily exercised by a franchisor for the purpose of
24protecting the franchisor’s trademarks and brand.
25The affected employment laws are Code chapter 216 relating
26to civil rights, Code chapters 85, 86, and 87 relating to
27workers’ compensation, Code chapter 91A relating to wage
28payment collection, Code chapter 91D relating to the minimum
29wage, and Code chapter 96 relating to unemployment insurance.
30Franchisee is defined under Iowa law as a person to whom a
31franchise is granted, including a subfranchisor with regard to
32its relationship with a franchisor and a subfranchisee with
33regard to its relationship with a subfranchisor. Franchisor
34is defined under Iowa law as a person who grants a franchise or
35master franchise, or an affiliate of such a person, including
-3-1a subfranchisor with regard to its relationship with a
2franchisee, except as otherwise provided by state law.
3The bill applies to work performed on or after the effective
4date of the bill.
-4-je/rn