Published on : Saturday, April 19, 2014
The International Franchise Association’s President & CEO Steve Caldeira released the statement below following the decision by the Connecticut House Finance Committee to reject HB 5069, an Act Concerning Low Wage Employers. The bill was introduced to the Connecticut State House by Reps.
Peter Tercyak (D-26), Riley (D-46), Albis (D-99) and Mushinsky (D-85) and would have undermined the legal foundation of franchise law in the state.
“IFA applauds the decision by the Connecticut House Finance Committee to protect Connecticut’s franchise businesses and strike down HB 5069. The bill would have made the unprecedented move of obligating franchisors to pay taxes on the employees of franchisees, despite the two being completely separate business entities. Franchisors in the state would have been faced with large new costs, making them more reluctant to extend opportunities for new locations and causing significant damage to Connecticut based businesses
“Nowhere in the country has the franchise industry ever seen a bill as potentially damaging as HB 5069, which would have effectively ended franchising in the state of Connecticut, home to roughly 8,000 franchise establishments that account for more than 100,000 jobs and $12.6 billion in annual economic output. While ignoring the decades of legal precedent establishing that these two entities are not joint employers, this bill was unprecedented in scope and sent a strong anti-business message to franchise organizations nationwide.
“Connecticut businesses are already being pressed hard by the impending implementation of the Affordable Care Act’s employer mandate, the proposed increase to the federal minimum wage so this important decision ensures that franchise businesses can continue to operate without unreasonable government interference into the franchise relationship.”