Trump issues executive order to significantly reduce small business regulations
President Donald Trump issued an executive order Monday aimed at significantly reducing regulation for businesses. Surrounded by small business leaders in the Oval Office, Trump slashed the new regulations budget to $0 and told reporters, “There will be regulation, there will be control, but it will be a normalized control.”
All businesses have to navigate around regulations, but for small businesses, where resources tend to be tight, the regulatory work can be particularly cumbersome — and costly.
The just-released 2017 Small Business Regulations Survey found that the average small business owner spends at least $12,000 a year dealing with regulations. In addition, 14 percent of small business owners spend more than 20 hours a month on federal regulations, and more than half of small business owners spend a staggering $83,019 average on regulatory costs in their first year of operation.
An Entrepreneurial Buzz Kill
Adam Robinson, founder of Hireology, says the company was formed and built “100 percent under the Obama administration,” and that though it was able to grow over the course of just two years from 30 to 120 employees, navigating regulations has been a challenge. If he were starting his business last year, he doubts he’d have been able to flourish, due to certain regulations.
“I testified in front of the House Small Business Committee on the issue of Department of Labor changing the threshold at which non-exempt employees are eligible for overtime,” said Robinson. “I told them that if this overtime regulation had been in place, I literally could not have hired my first employee.”
Once a small business brings on a 50th employee, it faces another set of regulations, including the Affordable Care Act’s employer mandate, which requires that all businesses with 50 or more full-time equivalent employees provide health insurance to at least 95 percent of their full-time employees and dependents up to age 26, or face a fee.
To avoid having to deal with that mandate, small businesses may be disinclined to expand.
“If I am a growing service business and I have 49 employees, there is an incentive to me to stop growing because as soon as I get to 50 I am mandated [under the Affordable Care Act] to provide healthcare to all my employees,” said Robinson. “There’s no incentive to grow if it places an administrative burden on my business.”
