Labor Department Rolls Back Obama Franchise Rules

The Washington Free Beacon discusses the rollback of the joint employer rule with Trey Kovacs.

The Department of Labor will roll back an Obama-era policy that attempted to increase regulatory oversight of franchise and contractor businesses.

Labor Secretary Alexander Acosta announced on Wednesday that the department would withdraw an Obama-era guidance that increased scrutiny for subcontractors and franchise businesses in which small businesses operate independently under the umbrella of larger corporations.

Trey Kovacs, a labor policy expert at the pro-free market Competitive Enterprise Institute, said that the Obama rules “needlessly hamstring worker and employer flexibility.” He said that the rules made it less likely for companies to contract out work to smaller businesses and could hamper competition among independent business owners.

“The labor rules at issue amounted to informal regulatory ‘dark matter’ that made it harder for people who want to be in business for themselves and punished large companies for contracting with smaller ones,” he said in a statement. “Today’s move by the Labor Department to remove barriers to economic opportunity is welcome news for job creators and workers.”

Read the full article at Washington Free Beacon.