Advocacy Update: January 27, 2020
AB-5 Copycat Leglislation in New York
The House of Commons returns to tackle NAFTA, and other issues
Today the House of Commons returned from its Christmas break. The first priority for the new minority parliament is passage of the new NAFTA deal (CUSMA/USMCA). For more information please see the attached article.
Peter MacKay officially launches bid for Conservative leadership
Former Conservative cabinet minister Peter MacKay formally launched his bid to replace Andrew Scheer on Saturday in his home province of Nova Scotia, where he first began his political career more than 20 years ago.
MacKay made the announcement in his former riding of Central Nova at the province’s Museum of Industry.
“Over four years ago I stood in this very room with family and friends, including Prime Minister Harper and many of you who are here again today, and announced that I would be leaving politics,” MacKay told supporters. “It was a tough decision.”
For more information please see the CBC article
Erin O’Toole launches Conservative leadership bid, promises to be the ‘true blue’ candidate
Ontario MP Erin O’Toole confirmed Monday he is joining the race to lead Canada’s Conservatives, promising to bring “true blue leadership” to the party as it looks for a successor to Andrew Scheer.
This is O’Toole’s second run for the leadership — he placed third behind Scheer and Maxime Bernier in the 2017 contest, with about 20 per cent of the vote on the final ballot.
O’Toole, who serves as Conservative foreign affairs critic, released a slickly produced campaign launch video highlighting his time as a tactical navigator in the Royal Canadian Air Force.
For more information please see the CBC article
2019 Novel Coronavirus infection (Wuhan, China): Outbreak Update
There is a lot of misinformation in the public about the recent Coronavirus outbreak. For factually correct up to date information on the outbreak please refer to the Canada Public Health Agency website. https://www.canada.ca/en/public-health/services/diseases/2019-novel-coronavirus-infection.html
US News –Major Win for Franchises as Department of Labor Issues Final Joint Employer Rule!
In a major win for America’s franchises, the U.S. Department of Labor (DOL) issued its final joint employer rule to update the regulations interpreting joint employer status under the Fair Labor Standards Act (FLSA).
This major rulemaking is the culmination of years of advocacy from the IFA and its members and allies.
“The changes in this final rule break down barriers that keep companies from constructively overseeing, guiding and helping their business partners,” said Wage and Hour Division Administrator Cheryl Stanton. “For small business owners, and the employees working in those businesses, the relationship and the guidance coming from franchisors and other contracting companies can greatly improve the workplace and help them create jobs.”
US Secretary of Labor Eugene Scalia and Acting Chief of Staff to the President Mick Mulvaney, penned an op-ed in The Wall Street Journal noting how the new rule will provide much need clarity to franchises: “The new rule also gives companies in traditional contracting and franchising relationships confidence that they can demand certain basic standards from suppliers or franchisees—like effective antiharassment policies and compliance with employment laws—without themselves being deemed the employer of the other company’s workers. That will help companies promote fair working conditions without facing unwarranted regulatory costs.”
The new test is based on determining if both businesses meet the following factors:
- has the power to hire or fire the employee?
- supervises and controls the employee’s work schedule or conditions?
- determines the employee’s pay rate and method of payment?
- maintains the worker’s employment records?
The final rule publishes in the federal register on January 16 and takes effect March 16.
In June, IFA had submitted comprehensive comments to the DOL arguing the importance of a revised joint employer rule that would restore its traditional interpretation of determining joint employment. IFA noted that under a similar law, the expanded joint employer standard had cost the American economy $33.3 billion per year, led to 376,000 fewer job opportunities, and resulted in a 93% increase in lawsuits against franchise businesses.
Additionally, in Fall 2018, IFA helped organize a Senate letter (led by former Sen. Johnny Isakson) signed by 26 senators and a bipartisan House letter (led by Rep. Bradley Byrne) signed by 84 House members to the DOL in Fall 2018 urging the development of a joint employer rulemaking under the FLSA. Among the letters’ signatories were Majority Leader McConnell (R-KY) and Majority Whip Thune (R-SD), and Democratic Reps. Scott Peters (D-CA) and Henry Cuellar (D-TX).
“On behalf of IFA, I applaud the DOL for today’s decision to return to a simple, clear, and thoughtful joint employer standard,” said Robert Cresanti, IFA’s President and CEO. “This resolution provides much-needed clarity for the 733,000 franchise establishments across America, and returns to the traditional standard of business that has fundamentally supported and encouraged franchise entrepreneurship for decades.” Read IFA’s full press release here.
New York Gov. Andrew Cuomo Prepares to Introduce AB-5 Copycat Legislation
On January 8, New York Governor Andrew Cuomo released a book of proposals for the 2020 legislative session during his State of the State address. During his remarks, Cuomo said that making reforms to worker classifications in the gig economy will be among the top priorities.
In September, Cuomo had said that New York will likely follow California’s lead in reclassifying independent contractors.
Uber and Postmates have already responded to similar legislation in California, by filing a lawsuit challenging California’s AB-5 in federal court. The lawsuit argues that AB-5 violates individuals’ constitutional rights and unfairly discriminates against technology platforms and those who make a living through them.
AB-5 works to codify the California Court decision in the Dynamex case which says “Employers may only classify a worker as an independent contractor if the hiring entity satisfies all three conditions of the test:
- that the worker is free from the control and direction of the hirer in connection with the performance of the work, both under the contract for the performance of the work and in fact;
- that the worker performs work that is outside the usual course of the hiring entity’s business; and
- that the worker is customarily engaged in an independently established trade, occupation or business of the same nature as that involved in the work performed.
Last month, members of the New York Assembly & Senate charged with drafting a bill, voiced concerns over the legal challenges and exemptions in AB-5, while acknowledging they still planned to move forward with legislation in 2020.
The CFA is working with the IFA to ensure that the principles of the ABC test do not make their way into Canadian public policy.