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Biden Vetoes “Joint-Employer” Repeal Proposal

President Biden has vetoed a congressional resolution to block a National Labor Relations Board rule that would classify many businesses as joint employers with their independent contractors and franchisees (Law360, subscription).

What’s going on: Last Friday, President Biden vetoed a proposal to repeal the so-called “joint-employer” resolution, passed by the House in January and the Senate last month.

  • The Congressional Review Act resolution “would have disapproved of a rule that broadens the circumstances in which linked firms, such as staffing agencies and their clients, are treated as joint employers of shared workers.”
  • The NLRB finalized its joint-employer rule last October, but in March, a federal judge vacated it, calling it too broad.
  • President Biden said in a statement the rule is necessary because without it, “companies could more easily avoid liability simply by manipulating their corporate structure.”

Why it’s important: The joint-employer rule could make it more difficult for manufacturers in the U.S. to hire temporary workers on an as-needed basis, “lead[ing] to significant disruptions in manufacturing operations,” the NAM told the NLRB last December.

  • “Further, it would exacerbate manufacturers’ ability to respond to changing market demands, including efforts to address acute workforce needs.”
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