The National Small Business Association (NSBA), which bills itself as “the nation’s first small business advocacy organization,” recently conducted a survey among 1,000 small-business owners, on how government regulations affect them. The survey was conducted between President Trump’s election and his inauguration from November 28, 2016 through January 10, 2017.
The survey found the two “most burdensome” regulations for small businesses were the federal tax code and the Affordable Care Act (commonly referred to as “Obamacare”). Business owners said they have also been taking the brunt of the regulatory burden to handle compliance. Fourteen percent of small business owners said they spend over 20 hours per month just on federal regulations.
NSBA President and CEO Todd McCracken said, “The average small-business owner is spending at least $12,000 every year dealing with regulations. This has real-world implications: More than half of small businesses have held off on hiring a new employee due to regulatory burdens.”
The NSBA asked business owners to estimate their first year’s regulatory costs, and the average ended up being an astounding $83,019.
According to the NSBA, about three out of four business owners said they read proposed regulations, while 63 percent said they only have to comply with those they read half the time or less. Forty-four percent said they spend 40 hours or more each year dealing with new and existing federal regulations alone. More than one in three spend over 80 hours a year studying and implementing regulations.
The top 10 most concerning regulations are: federal tax code, Affordable Care Act, overtime rules, state licensing requirements, reporting pay data by gender and race, independent contractor test, EPA Clean Water rule, limits on carbon emissions by power plants, the fiduciary rule for investment advisers and joint employer standards.
Since the survey was conducted, President Trump eased regulations with an executive order directing regulators to eliminate two rules for each one put into effect. The NSBA applauded this move.
Not all organizations representing small businesses believe federal regulations have been as time consuming and as much of a financial concern among business owners. Small Business Majority maintains through its own research that business owners have been more concerned with weak demand and the cost of health coverage, and that regulations at the state and local levels are more burdensome than the federal level.
Either way, it’s clear that under a new administration, things at the federal level are changing.