Ohio Employment Law Update – February 2019

Franchises and the Employment Relationship

On December 19, 2018, Ohio Governor Mike DeWine signed legislation (H.B. 494) regarding franchises and the employment relationship. Under the law, Ohio Rev. Code Ann. § 4111.14 was modified to clarify that the definition of an employer does not include a franchisor with respect to the franchisor’s relationship with a franchisee or an employee of a franchisee, unless the franchisor agrees to assume that role either:

• In writing; or
• A court of competent jurisdiction determines that the franchisor exercises 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 trademark and/or brand.

This definition of employer, and thereby franchise parameters, apply to all of the following laws:

• Ohio Minimum Fair Wage Standards Law.
• Ohio Bimonthly Pay Law.
• Ohio Workers’ Compensation Law.
• Ohio Unemployment Compensation Law.
• Ohio Income Tax Law.

Note: Under Ohio Rev. Code Ann. § 4111.14, franchisor and franchisee have the same meanings as in federal law at 16 C.F.R. § 436.1.

The law is effective March 20, 2019.

Read OH H.B. 494