HF 327 — A bill for an act relating to franchisor-franchisee relationships for the purposes of certain employment laws and including applicability provisions. (Formerly HSB 5.) Effective 7-1-19.

House File 327 - IntroducedEnrolled HOUSEHouse FILEFile 327 BYAN COMMITTEEACT ONRELATING COMMERCE (SUCCESSOR TO HSBFRANCHISOR-FRANCHISEE 5)RELATIONSHIPS A BILL FOR AnTHE ActPURPOSES relatingOF toCERTAIN franchisor-franchiseeEMPLOYMENT relationshipsLAWS forAND theINCLUDING purposesAPPLICABILITY ofPROVISIONS. certain employment laws and including applicability provisions.

TLSBSection 1512HV1. (3) 88 je/rn H.F.

327 Section 1.

For purposes of this chapter, a franchisor shall not be consideredHouse toFile be327, anp. employer of a franchisee or of an employee of a franchisee unless any of the following conditions apply:

2 considered to be an employer of a franchisee or of an employee of a franchisee unless any of the following conditions apply:

For purposes of this subsection, franchisee and franchisor mean the same as defined in section LSB523H.1. 1512HV (3) 88 -1- je/rn 1/4 H.F.

327 523H.1.

The franchisor has been found by the department to have exercised a type or degree of control over the franchisee or the franchisee’s employees that is not customarily exercised byHouse aFile franchisor327, forp. the purpose of protecting the franchisor’s trademarks and brand.

3 by a franchisor for the purpose of protecting the franchisor’s trademarks and brand.

The franchisor has agreed in writing to be considered to LSBbe 1512HVthe (3)employer 88of -2-the je/rnfranchisee 2/4or H.F.of the employees of the franchisee.

327 be the employer of the franchisee or of the employees of the franchisee.

EXPLANATION______________________________ The______________________________ inclusionLINDA ofUPMEYER thisCHARLES explanationSCHNEIDER doesSpeaker notof constitutethe agreementHouse withPresident of the explanation’sSenate substanceI byhereby thecertify membersthat ofthis bill originated in the generalHouse assembly.and is known as House File 327, Eighty-eighth General Assembly.

This______________________________ billCARMINE providesBOAL that,Chief forClerk the purposes of certainthe specifiedHouse employmentApproved laws,_______________, a2019 franchisor______________________________ shallKIM notREYNOLDS beGovernor considered to be an employer of a franchisee or of an employee of a franchisee unless at least one of two specified conditions are met.

The first condition is that the franchisor has agreed in writing to be considered to be the employer of the franchisee or of the employees of the franchisee.

The second condition is that the franchisor has been found by the governing state agency to have exercised 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 trademarks and brand.

The affected employment laws are Code chapter 216 relating to civil rights, Code chapters 85, 86, and 87 relating to workers’ compensation, Code chapter 91A relating to wage payment collection, Code chapter 91D relating to the minimum wage, and Code chapter 96 relating to unemployment insurance.

Franchisee is defined under Iowa law as a person to whom a franchise is granted, including a subfranchisor with regard to its relationship with a franchisor and a subfranchisee with regard to its relationship with a subfranchisor.

Franchisor is defined under Iowa law as a person who grants a franchise or master franchise, or an affiliate of such a person, including LSB 1512HV (3) 88 -3- je/rn 3/4 H.F.

327 a subfranchisor with regard to its relationship with a franchisee, except as otherwise provided by state law.

The bill applies to work performed on or after the effective date of the bill.

LSB 1512HV (3) 88 -4- je/rn 4/4