Project 2025 Blueprint Details Potential Overhaul of Labor Rules for Restaurant, Franchise Workers

A detailed policy blueprint prepared for a potential second presidential term for Donald Trump outlines a sweeping rollback of labor protections that would significantly alter the operating landscape for fast-food, restaurant, and other service-based businesses in the United States. The plan, known as Project 2025, proposes fundamental changes to rules governing joint-employer liability, worker tips, union organizing, and overtime pay, signaling a sharp departure from current and previous standards.

One of the most significant proposals targets the "joint-employer" standard, a legal doctrine that determines when a major corporation, like a fast-food franchisor, can be held responsible for labor violations committed by its franchisees. In April 2019, the Trump administration's Labor Department proposed a rule designed to shield corporate franchisers from such liability, and Project 2025 indicates a renewed focus on this approach. For the thousands of small business owners operating franchises, this change would shift the full weight of legal and financial liability for issues like wage theft and overtime disputes onto their shoulders, even though many operational standards are dictated by the corporate parent. A 2016 Bloomberg review highlighted the scale of the issue, finding at least one violation of minimum wage or overtime laws in 75 percent of Department of Labor investigations into fast-food restaurants. Shielding the corporate entity could limit the legal and financial recourse available to workers.

The framework also revisits regulations around tipped wages, a critical component of income for millions of service workers. During the first Trump administration, the Department of Labor pursued two key changes. In December 2017, it proposed a rule that would have allowed employers to legally pocket worker tips, as long as employees were paid the federal minimum wage. The Economic Policy Institute estimated at the time that this could have redirected up to $5.8 billion in tips from workers to business owners. After Congress intervened to prohibit this practice, the administration shifted focus. In February 2019, the DOL issued guidance loosening the Obama-era "80/20 rule." This rule had stipulated that employers could only pay the lower federal tipped minimum wage of $2.13 per hour if an employee spent no more than 20 percent of their time on non-tipped side work. By removing this cap, the guidance allowed employers to assign unlimited non-tipped duties while still paying the sub-minimum wage, potentially reducing the effective hourly earnings for tipped staff.

Against a backdrop of rising labor organization efforts at major service-sector companies, Project 2025 lays out an agenda to curtail the power of unions. According to an analysis by the International Union of Bricklayers and Allied Craftworkers, the plan would give employers new powers to retaliate against union organizers and would allow companies to initiate the decertification of union elections mid-contract. The blueprint also calls for the reintroduction of the Teamwork for Employees and Managers (TEAM) Act. This legislation would permit the formation of employer-controlled "councils," which labor advocates describe as sham unions staffed by management-picked employees. Critics argue these company-led organizations are designed to undermine authentic collective bargaining and weaken worker protections.

Beyond these specific areas, the proposals align with a broader deregulatory philosophy. While a formal position on the Labor Department's overtime rule—which seeks to expand eligibility for time-and-a-half pay—was not fully solidified during his first term, Trump expressed an intent to exempt small businesses from its requirements. This would affect a significant portion of the 6.5 million full-time restaurant industry employees. This approach extends to worker safety. For instance, in the meatpacking industry, the previous administration supported increased line speeds, a policy that worker advocates argue exacerbates already dangerous conditions. According to Occupational Safety and Health Administration data from 2015 to 2018, a meatpacking worker suffered a severe injury, such as the loss of a body part, approximately every other day.

The appeal of reduced regulatory complexity and lower direct labor costs is understandable for many business owners, especially those operating on thin margins like franchisees. However, our experience shows that relying on policies that weaken employee compensation and protections can be a shortsighted strategy. High employee turnover, low morale, and poor customer service are direct consequences of an unstable and underpaid workforce, and these factors can erode profitability far more than compliance with fair labor standards. True operational efficiency comes from creating stable, motivated teams, not from a race to the bottom on wages and benefits. Instead of banking on regulatory rollbacks, we advise clients to focus on sustainable growth through smarter operational design. This is where strategic business process reengineering becomes critical, helping companies optimize workflows and labor management to build a resilient and productive workforce. For guidance on structuring your business for long-term success, contact C&S Finance Group LLC at csfinancegroup.com.

As the election season progresses, business owners in the restaurant, franchise, and service sectors will be closely watching for further details on these labor policy proposals. The potential changes are substantial enough to require significant adjustments to business models, payroll systems, and legal compliance strategies should they be implemented. The outcome of the election will determine whether the industry continues under the current regulatory framework or prepares for a fundamental shift in employer-employee relations.