Can franchisees pass the buck on workers' comp?

PA Supreme Court will decide who's responsible for franchise employee injuries

A franchise relationship consists of a franchisor, who owns the trademark and operating systems for a business, and a franchisee, who manages the staff and daily operations. When an employee is hurt while working at a franchise location, who is legally responsible for his or her workers' compensation?

This spring, the Pennsylvania Supreme Court will settle this question. The court has agreed to hear a workers' compensation case that could affect franchise employees throughout the state.

Who is liable for employee injuries?

In the case before the court, an employee of a SaladWorks franchise was hurt on the job and sought workers' compensation benefits from both the franchisor and franchisee. A workers' compensation judge found that the franchisee was the statutory employer and therefore liable for any damages.

The Workers' Compensation Appeal Board, however, found that the franchisor is the statutory employer, comparing them to a contractor and the franchisee to a subcontractor (we'll discuss that relationship in a future post). The Commonwealth Court reversed that decision again and reaffirmed that the franchisee is legally responsible.

The state Supreme Court's upcoming decision should provide some authority and closure for both franchise owners and workers. If the court decides that franchisors are employers, those who own franchises could be forced to take a more active role in managing individual locations and employees.

In some cases - for example, if a Pizza Hut delivery driver is injured in a collision caused by another motorist - a third party may share liability. If you or someone you know has been hurt on the job, it is essential that you talk to a lawyer to protect your rights and determine how to proceed.

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