Millions of fast-food restaurant workers have suffered a setback in their fight for higher wages. Yesterday, the Trump administration rolled back legal recommendations that sought to define corporations like McDonald’s and its franchisees as “joint employers,” which would have made the larger entity ultimately liable for establishing fair pay and benefits.
Secretary of Labor Alexander Acosta announced in a press release that his department was withdrawing Obama-era guidance that stated corporations could be considered joint employers of employees who work for franchises — aka the businesses that are privately owned, but pay corporations like Subway and Taco Bell for the rights to corporate trademarks and strategies. With that guidance rolled back, courts can more narrowly define employee and employer relationships: McDonald’s CEO Steve Easterbrook has been among the most vocal opponents of joint employee rules, because as currently written, his brand is able to blame disputes over low wages or legal issues on franchisees, those private business owners.
The decision is a setback for Fight for $15, the grassroots movement that’s seeking to raise wages for many minimum wage workers, including employees of fast-food restaurants. It’s also a move that proves the Department of Labor under Donald Trump favors big business over workers’ rights.
Christine Owens, executive director of the National Employment Law Project, called the decision “disappointing,” noting that the original Obama guidances were designed to help both employers and workers comply with minimum wage laws. But she points out that “rescinding these documents doesn’t change the court decisions that they cite, nor anyone’s rights or responsibilities under the law. All it does is show the Trump administration’s willingness to take symbolic steps to attack workers — here, at the expense of additional clarity for all parties.”
Palak Shah, the director of social innovation at the National Domestic Workers Alliance, agreed in a statement to Buzzfeed News. "It makes it harder for employers to follow the law, harder for workers to thrive in this economy, and harder for the government to enforce the law," she said.
Under the Obama administration, employees who worked for franchises were deemed eligible to negotiate with the parent company. Pending litigation — such as a suit from last July in which a judge who ruled in favor of a class of McDonald’s employees ordered them to pursue litigation against McDonald’s corporation — may now more easily side with the corporation instead of its workers, as Buzzfeed News pointed out.
The National Restaurant Association’s director of labor and workforce policy, Shannon Meade, said in a statement to Nation’s Restaurant News that Acosta’s move was “a positive step in the right direction. However, we will continue to work with the Department of Labor as well as Congress on the previous administration’s controversial joint employer standard.”