Nationwide, many states are amending their employment laws to address the uncertainty of the joint employment doctrine under federal law, as evidenced by the apparent conflict between the recent D.C. Circuit decision in Browning-Ferris Industries of California Inc. v. National Labor Relations Board and the Board’s proposed rules on the subject. In an effort to address this uncertainty, Gov. Kasich, before leaving office in December, signed H.B. 494 into law. Effective March 20, 2019, H.B. 494 amends the definition of “employer” in several Ohio employment statutes to provide that franchisors are not the employers of their franchisees or the employees of their franchisees unless:

  • they have agreed to assume that role in writing, or
  • a court of competent jurisdiction determines that the franchisor exercises a type or degree of control over the franchisee or the franchisee’s employees that is not customarily exercised by a franchisor for the purpose of protecting the franchisor’s trademark, brand or both.

The specific laws amended were the Ohio Minimum Fair Wage Standards Act, the Bimonthly Pay statute, the Ohio Workers’ Compensation Act and the Ohio Unemployment Compensation Act.

While the outcome of the federal joint employer doctrine controversy undoubtedly will go a long way towards determining the long term significance of the Ohio statutory amendments related to minimum wage and overtime under the Ohio Minimum Fair Wage Standards Law, the amendments may have continued vitality as it relates to the bimonthly pay, workers’ compensation and unemployment compensation laws, which do not have comparable federal counterparts. These amendments also only relate to the franchising industry and do not impact any of the numerous other scenarios in which joint employer issues may arise.