New York CNN Business  — 

A new rule from the National Labor Relations Board could limit the responsibility of franchise operators, such as McDonald’s, for the millions of employees who work for their franchisees.

The rule involves what is known as joint-employer status for that group of employees. The final rule issued Tuesday by the three Republican members of the NLRB substantially narrows the instances where an employee could be found to have two employers rather than just one. There are currently no Democratic members of the labor board.

Employer groups hailed the new rule as a common sense solution to what they said was unclear rules that could leave franchisors on the hook in cases involving employees they don’t supervise or directly control. The previous rules put in place under the Obama administration did nothing but encourage baseless lawsuits, the groups said.

“It has led to a doubling of litigation against franchise brands,” said Mike Layman, the vice president of government affairs for the International Franchise Association. “Both the franchisor and franchisee are part of a very healthy ecosystem in today’s economy. They can both breathe a little easier knowing that they won’t be held responsible for the actions of a business partner.”

But labor groups said the new rules will make it more difficult for employees of franchisees to win changes that they say actually calls the shots in their workplaces – the franchisor.

One estimate from a pro-labor think tank, the Economic Policy Institute, puts the cost to employees at about $1.3 billion a year.

“This rule enables firms to avoid responsibility and liability,” said a statement from the EPI. “Weakening the joint-employer standard has serious adverse consequences for working people, such as depriving workers of the ability to bargain with the employer contracting for their services through an intermediary, who in most cases is the employer with ultimate control over wages, hours, and working conditions.”

The rules reflect the growth of so-called fissured workplaces. There are about 7.6 million employees of franchise owners, small businesses that might operate a restaurant, store or other outlet of a much larger company. There are also some 3 million employees working for temporary help services, according to the Labor Department. And millions more work for contractors providing services, just as janitorial services, for other firms.

Labor groups say the rule will make it more difficult for employees to organize unions at franchisees, such as fast food restaurants, and to get the franchisor involved in the negotiations.

But beyond the question of whether the employees can unionize, labor groups worry that the new rule will give employers greater incentive to contract out work and put another layer between themselves the employees who do their work.

“What this does is it incentivizes companies to contract out their responsibility as an employer,” said Celine McNicholas, EPI’s director of governmental affairs.

That can put downward pressure on wages, according to critics of the rule, as the franchisee or subcontractor takes a cut of the revenue from the company before paying their own workers.

“Businesses will make decisions based on the rules that are out there,” said Maneesh Sharma, associate general counsel with AFL-CIO. “Even if this doesn’t remove collective bargaining rights from workers who have it, it’s another contributing factor to the growing wage inequality.”