Biden Ends Small Business Week by Weakening Small Business

President Joe Biden marked the end of National Small Business Week by vetoing a resolution that would have protected franchisees and other small businesses.

H. J. Res. 98, a resolution introduced under the Congressional Review Act (CRA), passed both chambers of Congress on bipartisan votes earlier this year. If signed into law, the resolution would have overturned the joint employer final rule published by the National Labor Relations Board (NLRB) in October 2023, which broadly expanded the traditional understanding of the joint employer standard. This redefinition greatly increases liability for businesses such as franchises and threatens to bring sweeping economic harm.

When a similarly expansive rule was issued in 2015, studies indicated that franchise businesses could have seen billions of dollars in losses and hundreds of thousands of lost job opportunities for their workers. Moreover, the costs of the new rule, which could be even higher than under the 2015 standard, will pass through to consumers in the form of higher prices.

In the House, H. J. Res. 98 passed on a vote of 206-177, with eight Democrats joining Republicans in voting ‘yes’ and zero Republicans voting against the resolution. In the Senate, the resolution passed on a vote of 50-48, with three Democrats joining Republicans on passage. Just one Republican, Senator Josh Hawley (R-Mo.), voted against protecting small businesses from the NLRB’s overreach.

Typically, presidential administrations use National Small Business Week as an opportunity to highlight the ways in which they have helped small businesses thrive, or even as a time to introduce new pro-business policies. President Biden has decided to do the exact opposite. Despite the deleterious economic implications for American small businesses and bipartisan opposition to the joint employer rule in Congress, President Biden on Friday vetoed H. J. Res. 98, ensuring that small business owners will be buried in new red tape from NLRB.

The business community reacted immediately to Biden’s veto, expressing dismay with the President allowing an explicitly anti-small business policy to go forward during the week dedicated to empowering small businesses.

“With his tone-deaf veto during National Small Business Week of legislation that would protect America’s small and local businesses, President Biden has shown the American people where he stands on small businesses: he couldn’t care less about them,” said Mike Layman, a senior advisor to the Coalition to Save Local Businesses. “Everyone except for the president knows the expanded joint employer rule would cost small businesses billions of dollars in compliance and litigation, threaten workers’ livelihoods, increase costs on everyday goods and destroy hundreds of thousands of jobs – because that’s what it did the last time this misguided policy was in place from 2015-2017. The small business community needed President Biden’s help and defense, and instead they will remember his betrayal today.”

The White House may believe that announcing their veto on a Friday afternoon would ensure it avoids media attention. The workers, job creators, and patrons of American small businesses, however, will feel the effects of his maltreatment.