By Zvi Rosen, Assistant Chief Counsel
The Office of Advocacy hosted a Regional Regulatory Roundtable in Scranton, Pennsylvania on September 12, 2018 that attracted dozens of small businesses and their representatives who were eager to discuss federal regulations that burden small business.
One speaker spoke about the difficulties of working with the Federal Deposit Insurance Corporation (FDIC), which has taken over certain loans following bank failures. The loan was being paid properly; the FDIC was not accessible, until the business was able to buy out the mortgage with help from the SBA.
Several speakers spoke out about how the Affordable Care Act had negatively impacted their businesses – they found that their small business policies had been cancelled in some cases, or existing plans were replaced by plans with very high premiums. Multiple small businesses noted that the cost of premiums for employers under the ACA had doubled or even quadrupled. Another small business noted that with a large number of short-term employees, they had to generate close to 500 1095C forms, and that employees just throw the forms out. The burden of these changes on small business did not seem to directly correlate to the purposes of the Act. Employers are also feeling a need to stay under 50 employees to avoid the onerous regulatory burdens under the ACA of going above that amount. The change in the part-time determination to 30 hours a week for purposes of the ACA also posed challenges for a small business focused on part-time employment for home health aides, leading them to dramatically reduce their payroll.
Another theme Advocacy heard was about the impact of foreign competition. One small business noted that they held patents on their products, but infringing copies of their products were nonetheless getting through from China. This makes it more difficult to compete even though they hold a patent that in theory should protect their inventions and place in the market. Another small business noted that tariffs on aluminum make it harder to compete with foreign businesses who make their entire product overseas.
One small business owner described the impact of the US Navy decision to cease ordering its traditional pea coat in favor of a synthetic parka, despite the new garment having additional safety risks. The supply chain for the pea coat was explained to Advocacy staff, including how natural fibers are superior in certain conditions more likely to occur on a combat vessel.
A number of small businesses we heard from described difficulties in finding and maintaining staff, noting that finding qualified local workers was extremely difficult, while bringing in foreign workers through a visa program posed its own challenges. Small businesses repeatedly stated that they needed more ways to get qualified workers.
A small business that makes air conditioning units brought a Department of Energy regulation regarding air conditioners to the Office’s attention, noting that the DoE’s small business guidelines are not indexed to SBA’s guidelines, meaning that although definitely a small business under SBA guidelines, they do not qualify under DoE guidelines. As a result, even though they only make 10-20 commercial air conditioners a year, they are regulated under the same onerous rules as a company that makes 5,000 units.
Another small business that does mainly construction for state and local government noted that Occupational Safety and Health Administration’s (OSHA) crystalline silica guidelines are extremely challenging to comply with in outdoor projects where they’re drilling into concrete – they effectively need to keep everything wet and always have a shop vac running, even though they’re outdoors. Given that these are all public projects, it’s effectively a tax on a public expenditure.
The roundtable was a valuable experience for Advocacy. We had a chance to listen to small businesses from around the region explain the challenges federal regulations provide them as small businesses, as well as a chance to start a dialogue on mitigating some of these impacts.
Advocacy was in New Jersey, Pennsylvania, and New York for Regional Regulatory Reform Roundtables September 11-13.
Can’t get to a roundtable near you? Fill out this form and tell us about your federal regulatory burdens. We will pass this information on to the appropriate agency and use it in the planning of upcoming Regional Regulatory Reform Roundtables.
For more information on Advocacy’s mission, our regulatory reform efforts or to find out where the next Regional Regulatory Reform Roundtables will be held, please visit: https://advocacy.sba.gov/regulation/regulatory-reform/.
Zvi Rosen is an Assistant Chief Counsel for Advocacy whose portfolio includes intellectual property. Rosen can be reached at zvi.rosen@sba.gov