Commentary News News/Opinions 

‘Joint-Employer Rule’ removes benefits of franchising

Lynn Berberich

The number of women-owned businesses in Maryland has grown nearly 30 percent in the past decade — more than three times the national rate — meaning we have remarkable progress to recognize as we celebrated Women’s Small Business Month in October.

Our state boasts the third-highest percentage of women-owned businesses relative to men-owned businesses in the country.

Most of these operations are small businesses, which make up a significant portion of Maryland’s economy and face a unique set of challenges. As of 2014, there were more than half a million small businesses here, employing over one million workers and making up 97.5 percent of the state’s employers.

So close to the elections, I strongly feel our lawmakers and our policies should be doing everything in their power to help those firms. As a business owner in Baltimore, I can attest that the single greatest support our government could offer would be ensuring our federal rules better-consider how they will impact small businesses, their owners and their employees.

Since I opened BrightStar Healthcare of Baltimore City/County, a private duty home care and medical staffing provider, in 2009, many things have changed. I went from being a byproduct of the 2009 recession’s layoffs to an independent business owner. I was able to create 200 new jobs that didn’t exist before. I have been able to go out of my way to support other women workers, employing them as nurses, physical and occupational therapists, and Certified Nursing Assistants.

When I think back on my decision to open a home healthcare business, I was attracted to the franchise model as it helped to reduce the risk of opening a new business during a bad recession and investing my family’s life savings. BrightStar’s model helped me establish myself as a business owner and create economic opportunity for my employees, while providing high quality care for our clients. Recently, the National Labor Relations Board redefined a 30-year-old definition of joint-employer. The new regulation undermines the franchising model by putting franchisors at risk and discouraging franchisees.

Under this rule, rather than acknowledge me, a franchisee, as an independent business owner responsible for my hiring decisions and day-to-day operations, the NLRB expanded the liability to my franchisor and put them on the hook for decisions they don’t personally oversee. Being risk-adverse, my franchisor has withdrawn services because of the new risk involved.

Already, this regulation has changed the reality of my business and removed many of the benefits the franchising model offered in the first place. Through the fees I paid as a franchisee, I was able to use BrightStar’s integrated applicant tracking system to help me find great employees. That service, however, has been halted, which has slowed my ability to hire and expand my business. I now must pay out-of-pocket for an online recruiting and applicant tracking system.

The same could happen to our payroll system over the next year. In the past, when I was recruiting for high level office staff, I could ask the Corporate Clinical Director to also interview the candidate and give me their perspective on the more technical aspects of the role. Because of the joint employer rule, corporate staff will no longer involve themselves with the interview process for applicants. Corporate also provided training programs for new office staff, which have now been reduced. I was considering purchasing a third territory to expand BrightStar Care, however there is too much ongoing uncertainty.

Rules like the joint-employer regulation not only impact the ability of small business to navigate the messy and overwhelming regulatory system, but also stunt investment and growth — both of which are critical to the health of our economy. I don’t believe policymakers or the NLRB meant to negatively impact businesses like mine, but this regulation has a very real effect on the ability of small businesses to sustain themselves.

Washington has a responsibility to ensure that the regulatory process is understandable and manageable for folks outside of the capital, and to see that the voices of small business owners are reflected in the policies they churn out. Doing so would lead to smarter regulations, greater confidence in the government and a stronger chance of success for the small businesses that make up the backbone of our economy.

As we reach the end of another election cycle, I hope our new elected officials will take every step necessary to support the small and women-owned business growth and reconsider the rules and regulations that truly hamper growth.