10 Most Common HR Issues for Franchises - and How To Address Them

10 Most Common HR Issues for Franchises - and How To Address Them

These days, even experienced franchise owners can be overwhelmed by human resource demands and compliance challenges. In a new report, XpertHR identified the 10 most common HR dilemmas faced by franchises and offered guidance on how to address them. The white paper can help franchises - franchisors and franchisees alike - deal with issues such as joint employer liability, employee leave, reasonable accommodation requests, paid sick leave, employee classification, overtime requirements, finding and hiring the right employees, onboarding and training, protected activity, and more.

While all franchises face similar issues, smaller franchisees, typically focused on running their business and putting out fires, generally focus on day-to-day employment challenges and struggle to stay current with legal and workplace trends. Many don't have an HR function but are still responsible for ensuring employment law compliance. Some might even be tempted to let employment issues slide, which can lead to significant legal problems and related costs.

"Franchise owners, both small and large, should have a thorough understanding of federal, state, and municipal employment laws, anticipate changes and proactively manage their workforce to reduce the potential for employer liability," says Tracy Morley, legal editor at XpertHR.

Franchisors know that franchisees are independent business owners responsible for the business decisions they make. And while the overwhelming risk is primarily to franchisors if they are held accountable for the mistakes of their franchise owners, franchisees will feel the effects as well, since damage to a franchisor's brand could negatively affect a franchisee. In an effort to preserve the franchisor-franchisee relationship, franchise owners must ensure that customers and employees alike understand that the franchisor is not the employer.

XpertHR's top employee management and HR compliance issues for franchises are:

  • Joint employer liability - Franchisors can reduce the risk of joint employer liability by not involving themselves in the daily operations of the franchisee, particularly when it comes to personnel-related decisions.
  • Employee leave and reasonable accommodation requests - An employer's leave policies should not contain provisions for automatic termination of employment of employees on leave and should demonstrate they are willing to provide reasonable accommodations to employees.
  • Paid sick leave - An employer that operates in a state or city that requires paid sick leave should ensure compliance with existing laws.
  • Minimum wage, employee classification, and overtime requirements - These areas pose a substantive risk for employers and are increasingly becoming the subject of class action lawsuits.
  • Hours worked - Since franchises often hire minors, it is important to have an understanding of working hour restrictions for those individuals.
  • Finding and hiring the right employees - Know how to conduct a job interview and exercise reasonable care in the hiring process. Ensure compliance with employment laws applicable to the recruiting and hiring process, such as "ban the box" legislation.
  • Onboarding and training - Have an onboarding procedure for new employees and offer required training such as anti-sexual harassment training.
  • Performance management - Performance expectations should be clearly communicated and performance-related issues documented before they result in termination.
  • Changing landscape of protected activities under the National Labor Relations Act - Franchisees should recognize that the NLRA applies to their workforce, even if they are not unionized.
  • Workplace safety - Franchises should have appropriate workers' compensation insurance in place and know how to handle a workers' comp incident.

XpertHR's online service provides HR professionals with practical compliance tools and comprehensive guidance on federal, state, and municipal law, helping employers stay current with evolving and complex employment law issues. For a free copy of this white paper, visit XpertHR.

Published: July 20th, 2015

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