Are franchisees more prone to employment standards violations than other businesses? Evidence from Ontario, Canada

Mark D Easton, Andrea M Noack and Leah F Vosko
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Mark D Easton: York University, Canada
Andrea M Noack: Ryerson University, Canada
Leah F Vosko: York University, Canada

The Economic and Labour Relations Review, 2021, vol. 32, issue 1, 39-64

Abstract: Using an administrative dataset from the Ontario Ministry of Labour, we investigate three hypotheses about employment standards violations among franchised businesses: (1) franchisees have a higher probability of violating employment standards than other businesses, (2) franchisees have a higher probability of monetary/wage-related ES violations than other businesses, and (3) franchisees have a lower probability of repaying monetary/wage-related violations than other businesses. The results of our statistical models suggest that overall, franchisees are indeed more likely to violate ES, have a higher probability of monetary/wage-related violations, and are less likely to repay such violations. However, the results vary substantially by industry. While franchisees had only marginally higher probabilities of an ES violation in two of the seven industry-groups examined, five of the seven industries showed substantially higher probabilities of a monetary violation. The results also show that franchisees in three industry groups (retail, accommodation and food services, and education, public administration, healthcare and social services) are particularly prone to monetary violations. JEL codes: J83, J88, J89

Keywords: Canada; compliance; employment standards; enforcement; franchising; industry; labour standards; legal violations; Ontario (search for similar items in EconPapers)
Date: 2021
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Persistent link: https://EconPapers.repec.org/RePEc:sae:ecolab:v:32:y:2021:i:1:p:39-64

DOI: 10.1177/1035304620961862

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