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
Definition of Waters of the U.S. Under the Clean Water Act — Proposed Rule Sent to be published in April
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 rule could impose federal mandates for water quality levels in these local waters or land uses. What’s most troublesome is that the EPA proposed the rule without doing required Regulatory Flexibility Act processes. EPA claims that the rule will have no significant impact on small businesses even though the rule will clearly restrict the ability of small businesses to expand or develop their land and decrease land value.
Lead: Renovation, Repair, and Painting Rule for Public and Commercial Buildings — Proposed Rule Stage
Following on its problematic Lead: RRP rule covering residential housing, the EPA is poised to expand the rule to cover commercial buildings. While the goal of the rule – protecting people from exposure to lead dust – is laudable, EPA has not yet issued a study or identified data that shows if lead dust from these buildings impact surrounding neighborhoods. In addition, EPA appears intent on adapting its residential rule for commercial buildings. NFIB is concerned about his approach because the residential rule is punitive mostly to companies that try to comply. About 35 percent of small employers, who operate their business outside of their house, own all or part of the building or land on which their business is located. These small businesses face higher costs as well.
Greenhouse Gas Emissions; New and Existing Power Plants — Proposed and in Development at Agency
EPA’s efforts to regulated greenhouse gas emissions have started with coal and natural gas power plants. A first rule covering new plants was published in January 2014. A second, and likely more economically damaging, rule covering existing power plants is due to be proposed in 2014. NFIB is concerned about the rules’ impact on affordable electricity, one of the most important costs a small business owner faces.
Department of Labor
Wage and Hour Division – Expansion of Overtime Eligibility – Pre-rule stage
President Obama recently directed the DOL to revise regulations relating to overtime eligibility, specifically to find ways to expand time-and-a-half pay to more workers. Unfortunately, this will come at the expense of small business owners. Like most government mandates on business, increasing the number of workers eligible for overtime will have a deep and disproportionate impact on the small business sector. The vague detail offered by the administration on what the regulation will look like only increases uncertainty for small businesses, and makes them less likely to add new workers.
OLMS – Interpretation of the “Advice Exemption” — Final Rule 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. Rule is due out in spring 2014.
OSHA – Crystalline Silica — Final Rule at Agency
OSHA is proposing to half the permissible exposure limit for silica, the second most common mineral in the earth’s crust. The proposal will have serious impact on industries like construction and manufacturing. In addition to lowering the limit, OSHA wants to mandate other expensive requirements on small businesses like engineering controls, medical monitoring of employees, and a vast recordkeeping burden. This is despite the fact that OSHA is unable to ensure compliance with the current PEL for about 30 percent of businesses nationwide. NFIB believes if OSHA ensured compliance, it could largely solve the workplace silica issue.
OSHA – Improve Tracking of Workplace Injuries and Illnesses — Final Rule at Agency
OSHA is proposing changes to its reporting system for occupational injuries and illnesses that would require employers to submit data from its injury logs electronically to the agency. OSHA will then take the data and create a database – with establishment-specific information – that is available to the public. Our concerns range from the public misinterpreting the safety of businesses to unions using the information to target certain businesses for unionization.
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, however in the most recent Regulatory Agenda OSHA set an expected publication date for the proposed rule of September 2014.
OSHA – NAICS Update and Reporting Revisions — Final Rule 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.
NLRB – Representation: Case Procedures — NPRM published 02/06/14
Commonly referred to as its “quickie elections rule,” the NLRB has re-issued a proposed regulation that would streamline the union-election process. The Board’s goal is to reduce the median length of a union election substantially from the current 35 days. NFIB believes that an employee’s informed choice will be compromised because the shortened timeframe means owners will have to scramble to obtain legal counsel and will have little time to talk to their employees. This shortened timeframe would hit small businesses particularly hard, since small employers usually lack labor-relations expertise and in-house legal departments.
DOJ – Accessibility of Web Information and Services — Proposed Rule Stage
DOJ will propose regulations requiring websites to be accessible to the disabled under the Americans with Disabilities Act. NFIB is concerned that the agency will propose that businesses must retrofit their current websites with accessible technologies, which would be painstaking and expensive. A proposed rule is scheduled to be published in April 2014.
SEC – Crowdfunding — Final Rule at Agency
The recent JOBS Act required the SEC to issue regulations to allow for crowdfunding for businesses. NFIB believes these rules should be crafted in a way so as to not inhibit any current funding mechanisms small businesses may use, such as angel investors. The proposed rule would require small businesses to file certain information with the SEC.