The U.S. Senate narrowly approved a proposal on Wednesday to overturn a federal regulation that would expand the definition of joint employment. 

The chamber voted 50-48 to reject the National Labor Relations Board (NLRB) rule, which would increase the possibility of franchisors being jointly responsible for labor violations committed by their franchisees and require both entities to bargain with employee unions. 

The Senate vote marks another victory for Republicans and business groups in their months-long effort to prevent the rule from taking effect. They say the broader definition of joint employment would upend traditional franchisor-franchisee arrangements and undermine businesses that rely on third-party staffing agencies and other service providers. 

“The new standard amounts to more regulatory red tape threatening the very existence of small businesses, especially those that follow the franchise model,” Senate Minority Leader Mitch McConnell said on the floor of the chamber Wednesday. He added that the new labor rule would create “even bigger headaches” for small business owners and “turn them into middle managers.” 

Introduced in October, the new rule would replace a Trump-era regulation that requires companies to have “direct and immediate” control over workers in order to be considered joint employers. It would expand the standard to include companies with indirect control over working conditions such as pay, scheduling, discipline and supervision—even if that control isn’t exercised. Proponents, including many Democrats as well as unions and workers advocates, argue the new rule is needed to prevent large employers from using contractors and sub-contractors to circumvent labor negotiations.

The regulation has encountered dual challenges both on Capitol Hill and in courtrooms. It was set to take effect last month but was blocked by a federal judge in Texas, who concluded the changes are “arbitrary and capricious” and that the NLRB violated federal labor law by setting too broad of a standard when redefining what constitutes joint employment. That ruling came from a lawsuit filed by a coalition of business groups, including the U.S. Chamber of Commerce, the International Franchise Association (IFA), and the Restaurant Law Center, among others. A separate challenge remains in the D.C. Circuit Court.

At the same time, opponents have been spearheading lobbying efforts to overturn the regulation through the Congressional Review Act. That law enables Congress to repeal agency rules through a simple majority vote in both chambers. It passed by a 207-177 vote in the House of Representatives in January. With the Senate backing the measure, it now heads to President Joe Biden’s desk for an expected veto. A two-thirds majority would be required to block the new rule from taking effect if that happens.

The National Restaurant Association issued a statement on Thursday warning that the broader standard would have “profound and far-reaching repercussions” across the industry, burdening restaurants with heavy regulations and legal liabilities that stifle entrepreneurship and economic growth. Sean Kennedy, the association’s executive vice president for public affairs, said he hopes the president “will give serious consideration to signing the resolution” 

The IFA sent a petition from the franchise community to Biden urging him to reject the new joint employer rule following yesterday’s vote. It was signed by over 5,300 individuals, including small business owners, franchise brands, and other stakeholders. 

“President Biden now must join the bipartisan effort to reject this proposal or he will be telling franchise businesses in every state that he doesn’t support them,” IFA president and CEO Matt Haller said in a statement. “[He] can be both pro-union and pro-franchising, but not if he supports this joint employer rule. Franchising is the greatest avenue to owning your own small business, especially in underrepresented communities, but if the president rejects the bipartisan opposition to the rule, he will eliminate one of the best paths to wealth creation.”

Biden blocked several resolutions aimed at rolling back regulatory actions from executive agencies under his administration last year. Congress failed to override the vetoes in each of those cases. A similar fate could be in store for the joint employer rule, considering the disapproval resolution cleared both chambers with less than a two-thirds majority.