Laws throw a wrench into framchise businessOn September 17, 2013, the Obama administration announced that some 2 million home health care workers will no longer be exempt from overtime pay. Home health care is hot in franchising. With baby boomers aging, the demand for home health care is expected to increase, and increase for some time to come. Each day new franchise home health care businesses are opening.

But, what does this new law mean to the home health care franchises? Before September 17, 2013, many home health aides fell into an exemption under Fair Labor Standards Act [FLSA]. Before September 17, 2013, many home health care aids could be classified as rendering companionship services. Come January 1, 2015, home health care workers can no longer be exempt from overtime and minimum wages. For some states this will not be much of an issue. In about 20 states, home care aides are already covered by state wage and hour laws. But, for the rest of the 30 some odd states, this may mean a major shift in daily franchise operations.

Most commonly in the franchise agreement, the franchisees are obligated to know and comply with the federal and state legislative changes. If a new law is passed, the franchisee must have its ear to the ground. Beware of the new law. Change and comply with the new law. The onerous is on the Franchisee.

Many franchisors, as a part of their consulting services, will help and support franchisees in learning about and becoming compliant with new laws. This is an added bonus. It is, however, not an obligation of the franchisor.

What is work under the federal Fair Labor Standards Act, Under federal wage and hour laws?  The answer can be tricky.  Listen to 3 examples.

When buying a franchisee  and as a franchisor and franchisees what can you do to stay informed about and compliant with new laws? Here are 4 things you can do within your franchise system:

  1.  Learn the laws: that affect your franchise including federal, state, and local laws.
  2.  Keep the channels open: establish an intranet or other online forums where franchisees and franchisors can share and discuss legal issues and solutions that are working.
  3.  Invite professionals to impart knowledge: plan a webinar, reserve space during the national or regional franchise convention to have professionals speak about statutory and regulatory changes in the industry.
  4. Make it a priority: During advertising council meetings, carve-out time to discuss legislative changes. Form a subcommittee devoted to legislative changes.



Have a question about what is work or your company pay practices? Click here to schedule a Virtual Sidebar. Get answers to your wage and hour questions.

New Law Throws a Wrench in Franchise Business Operations.

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