Texas Employment Law Update – July 2015

Jul 22, 2015

Texas

Employment Status

On June 19, 2015, Texas Governor Greg Abbott signed legislation (S.B. 652) to exclude a franchisor as an employer of a franchisee or a franchisee’s employees.

The bill amends the Texas Labor Code to establish that:

  • A franchisor is not considered to be an employer of a franchisee or a franchisee’s employees for purposes of statutory provisions relating to employment discrimination, statutory provisions relating to payment of wages, the Texas Minimum Wage Act, or the Texas Workers’ Compensation Act, including provisions relating to worker’s health and safety.
  • A franchisor is not considered to be in a co-employment relationship with a franchisee or a franchisee’s employees for purposes of statutory provisions governing professional employer organizations.
  • The general definition of “employer” in the Texas Unemployment Compensation Act does not apply to a franchisor with respect to a franchisee or a franchisee’s employees.

With respect to a franchisee or a franchisee’s employee who has made a specific claim for relief under the applicable statutory provisions, the bill does not apply to a franchisor who has been found by a court of competent jurisdiction to have exercised control over the franchisee or the franchisee’s employees of the type or degree not customarily exercised by a franchisor for the purpose of protecting the franchisor’s trademarks and brand.

The law goes into effect on September 1, 2015.