Small businesses face increasing compliance costs as more and more federal regulations are handed down from Washington.
The Small Business Administration’s Office of Advocacy recently noted that compliance with environmental regulations, for example, costs 364 percent more in small firms than in large firms. The Environmental Protection Agency (EPA) has over 331 environmental regulations under consideration.
With so many laws and regulations already on the books, our national leaders would be better served enforcing the current slate of requirements instead of creating new ones. Below is a list of current and proposed federal regulations that impact small businesses.
Environmental Protection Agency
Boiler MACT — Final Rule Issued on 12/21/12
The EPA issued a proposed revision of rules regulating emissions from industrial boilers in December 2011. The agency is reconsidering a final rule issued in January 2011that set limits virtually unattainable by new and existing boilers and was estimated to impose a $10-$20 billion hit on the economy. NFIB is hopeful that the EPA will ultimately issue a health-based standard, as opposed to a strict technology-driven standard. This change alone could cut the cost of the rule in half.
National Ambient Air Quality Standards for Particulate Matter — Final Rule Issued on 12/14/12
EPA has issued final national ambient air quality standards for particulate matter under a settlement with states and advocacy groups. EPA issued a rule in will set a health-based, primary standard for fine particles at 12 micrograms per cubic meter (µg/m3). The current standard is 15 µg/m3. NFIB is concerned for several reasons related to development and expansion of business facilities, but primarily because the EPA has not demonstrated a need for the standard to be more-stringent than the current one.
Guidance Defining Waters of the U.S. Under the Clean Water Act — Final Guidance Sent to OMB on 02/21/12
The EPA is aiming to expand the definition of U.S. waters that are “navigable” – in some cases, to even small depressions or farm ponds that do not impair the flow of rivers. Despite state jurisdiction, this guidance could impose federal mandates for water quality levels in these local waters or land uses. What’s most troublesome is that the EPA refuses to do a formal notice-and-comment rulemaking, which would allow transparency to the public, and instead has chosen to regulate via guidance – which requires no formal economic impact analysis or accountability to the public and the regulated community.
Utility MACT — Proposed Rule Sent to OMB on 11/07/12
The EPA has agreed to reconsider mercury and air toxics standards issued in December 2011 for newly built power plants. The initial final rule was poorly structured and excessively stringent. It was likely to lead to significant increases in energy prices for small businesses. At an agency-estimated cost of $90 billion on the economy over 10 years, it remains the most expensive rule in history. Most of the costs and benefits come reducing particulate matter from the air, not the mercury and other toxic emissions the rule is supposed to be aimed at.
Department of Labor
Wage and Hour Division – Application of the FLSA to Domestic Service — Final Sent to OMB on 01/15/13
The DOL’s Wage and Hour Division has proposed that third-party employers – small businesses – pay minimum wage and overtime to home care workers. Expanding the coverage of the Fair Labor Standards Act to these workers will significantly increase the cost of in-home companion care. The result will be fewer businesses in the industry, fewer jobs and less reliable employment for workers, and unsustainable costs for the elderly and disabled. NFIB believes that the DOL should keep the companionship exemption for minimum wage and overtime pay to covered workers.
OSHA – NAICS Update and Reporting Revisions — Final at Agency
OSHA proposed to update the list of industries required to maintain OSHA 300 logs in June 2011. The problem with the proposal is the formula they used to choose the industries to include. OSHA simply selected the 25 percent of industries with the highest injury rates. The issue is that some of the industries that have previously been exempt, but under this proposal would have to comply, actually have lower injury rates now than under the previous update.
OLMS – Interpretation of the “Advice Exemption” — Final at Agency
Also known as the “persuader rule,” the DOL’s Office of Labor-Management Standards (OLMS) has proposed a rule that would greatly inhibit the ability of small businesses to rely on labor experts. For nearly 50 years the DOL has recognized that legal advice is excluded from reporting under federal labor law. The proposed new rule would force lawyers and law firms that counsel a small business on most labor relations matters, and whether the business has a union or not, to disclose not only their work with that client, but also all fees and arrangements for all clients for all labor-relations services. The net result could well be that many lawyers will no longer take on clients seeking labor-relations counsel.
OSHA – Crystalline Silica — Proposed Rule Sent to OMB on 02/14/11
The proposed crystalline silica rule has been at OMB for nearly two years. It is controversial because it is believed the permissible exposure limit that OSHA wants to propose is significantly lower than what has been scientifically shown to be dangerous to humans. The rule stands to have a major impact on the construction industry, among others.
OSHA – Improve Tracking of Workplace Injuries and Illnesses — Proposed Rule Sent to OMB on 11/22/11
OSHA is proposing changes to its reporting system for occupational injuries and illnesses. An updated and modernized reporting system would enable a more efficient and timely collection of data and would improve the accuracy and availability of the relevant records and statistics. So far, there is no reason for concern but we will watch the NPRM to see how the rule is structured.
OSHA – Injury and Illness Prevention Program — At SBAR Panel Stage
OSHA is developing a rule requiring employers to implement an injury and illness prevention program. It involves planning, implementing, evaluating, and improving processes and activities affecting employee safety and health. Developing a formal program could be a costly exercise for small businesses and become a paperwork nightmare. Furthermore, the program would likely require small businesses to address all “foreseeable” hazards – meaning that any workplace accident, no matter how unlikely, could be interpreted as foreseeable and expose small firms to fines and penalties. A Small Business Advocacy Review panel was supposed to begin in March 2012 but was delayed until after the election. There is still no word as to when it will begin.
OSHA – Musculoskeletal Disorders — Long Term Agency Action
OSHA proposed to add the musculoskeletal disorders column back to the OSHA 300 log in January 2010 to obtain data on how many injuries of this type take place. MSDs are so difficult to determine that even medical professionals can have a hard time making a diagnosis. OSHA thinks that not only can small business owners make this determination – but they can do it in about five minutes and at virtually no cost. More worrisome, this action is widely considered to be the first step toward some sort of ergonomics rule like the one Congress overturned in 2001 using the Congressional Review Act.
Wage and Hour Division – Right to Know Under the Fair Labor Standards Act — Long Term Agency Action
The DOL’s Wage and Hour Division plans to propose a rule that would require businesses to conduct an analysis and disclose to workers their status as the employer’s employee or an independent contractor and how their pay is computed. Expected to be proposed in the near future, these analyses will require small-business owners, the main regulatory compliance person at almost every small business, to perform potentially lengthy paperwork for every new employee they hire. The additional paperwork will require more time away from running the business and open the door to paperwork mistakes that could lead to fines and penalties. The rule was dropped from the most recent Semiannual Regulatory Agenda in January 2012, but we expect it to be resurrected at some point in President Obama’s second term.