Small business regulations have gone up during President Obama's administration, a new report finds. What does that mean for small businesses, and why should business owners care?
On one hand, compliance with all the regulations can place a big burden on small businesses. On the other hand, many of the regulations are aimed at leveling the playing field for workers.
According to Forbes, some 854 new rules were approved in 2012. That's a 3.9% increase over 2011.
In fact, over the last three years, more than 800 new regulations have been approved annually, Forbes reports. The numbers haven't been so high since 2003.
Is this a good or bad for small businesses? According to a recent Gallup poll, one in three small business owners are worried that they'll go out of business, citing government regulations as their biggest challenge.
But proponents of business regulations maintain that these have no negative impact on small businesses at all. They cite surveys showing that business owners point to a lack of demand, not government policy, as their main hindrance in hiring new workers, Politico points out.
As the debate over "good" and "bad" regulations continues, hundreds of regulations affecting small businesses were introduced in the past year. There are too many to list in any detail, but business owners may want to look up some specific new rules affecting:
- The Fair Labor Standards Act (FLSA),
- Social Security,
- The Federal Insurance Contributions Act (FICA),
- The Equal Pay Act,
- The Immigration Reform Act,
- The Federal Unemployment Tax Act (FUTA),
- The Employee Retirement Income Security Act (ERISA),
- The Occupational Safety and Health Act (OSHA),
- The Age Discrimination Act, and
- The Family Medical Leave Act (FMLA).
Notice that a large part of small business regulations affect employment issues. So in essence, the purpose of these regulations isn't to make business more difficult. Rather, it's to make working less burdensome for those with challenges. After all, a bad economy doesn't only affect entrepreneurs, it also affects those who lose their jobs and benefits.
From a small business perspective, these regulations can be a headache at times. But are they really that bad for the economy and for the nation as a whole?
Feb. 9, 2013 Editor's Note: This post was updated to correctly report the increase in new regulations between 2011 and 2012.
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