By Christine Myers, Region 2 Advocate
The Office of Advocacy hosted a Regional Regulatory Reform Roundtable in Poughkeepsie, New York on September 13, 2018 that attracted multiple small businesses and their representatives who were eager to discuss federal regulations that impact their businesses. The business owners ranged from construction to banking to agriculture, but they shared common aggravations concerning federal regulations. The first of many topics involved employees and the significant effort it takes a small company to comply with labor related regulations. Jerry Senft, owner of S&O construction, complained about the significant time and effort it takes him to comply with OSHA reporting. “Smaller companies need help!” Mr. Senft also pointed out that OSHA does not recognize the employee’s responsibility to protect themselves. The business is responsible for maintaining a safe workplace and is responsible for all OSHA violations,including financial penalties for any on the job accident. But, as Mr. Senft pointed out, the employee is part of the equation. If the employees have been trained, shouldn’t they be equally responsible to avoid unsafe situations?
Janet Giannetta, a human resources executive, echoed Mr. Senft’s sentiments about compliance. Many of her clients tell her how burdensome the electronic reporting is to their businesses. She said, “It is very challenging and time consuming to learn and input data, and this was just for the summary log!”
Janet’s retail and hospitality clients expressed great concern over the “call in pay” rule that places the burden on business owners, not the individual, to find a replacement for their shift. If you have ever been a wait person or a bus person in a restaurant, you knew it was up to you to find someone to take your shift. Now, the manager needs to do it, and, given the high rate of no-shows and turnover, the manager is left scrambling at the last minute to find a replacement. Although there are certainly emergencies that prevent proper preparation for a substitute, why is it even good for the employee not to have the responsibility for finding a substitute for their shift? When you know you are responsible to show up for work or secure a replacement, you take that workplace seriously. If you can just not show up whenever you don’t want to work, it’s not only bad for the company but also equally bad for the individual who fails to learn individual responsibility.
The overtime rule is also problematic, and she suggested leveraging the 2004 ruling to avoid confusion. She suggested reasonable thresholds be established to avoid the pay compression that is going to happen between those paid overtime and those on straight pay. Without thresholds, the small company will be forced to increase pay among lower paid management who don’t receive overtime or risk losing them. The cost of all these pay increases could be devastating.
Members of the banking community shared with us their frustration about having regulators with little experience in their industry audit their lending practices and force actions that have negative impacts both on the bank and the borrower. Like many other community banks and credit unions, Hudson Valley Federal Credit Union knows their customers and knows what is best for them and the bank. Regulators require appraisals on commercial mortgages and are pushing for shorter term loans (to them three to five years is best) with balloons. Ms. Batten, of Hudson Valley Federal Credit Union, voiced the negative impact of this logic: Balloon loans will force customers to refinance, which means it costs the clients money they should not need to spend, and the bank risks losing their business to another bank.
Cyber security continues to be a recurring concern in every forum, and what the government can do to help protect them and their business. Jeff Grim of LP3 voiced his concerns regarding the impracticality of the costly cybersecurity regulations being placed on small businesses. From HPPA to CPI for Federal Acquisition Regulations (FARs) and Defense Federal Acquisition Regulations (DFARs), even the smallest of small companies are being forced to comply. Additionally, tiny companies who are subcontractors for federal contracts are required to obtain general liability and umbrella insurance at the same level as a prime contractor. If they cannot afford to do so, they are disqualified from bidding.
Whether you work in Poughkeepsie or Trenton or Atlanta, small businesses confront the same reality – federal regulations. When not implemented in a flexible manner, federal regulations can kill small business and exhaust the resources and the energy of the owners. With 7 out of every 10 new jobs in America coming from small business, can we afford not to pay attention to the engine that provides the revenue on which our country depends?
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/.
Christine Myers serves as the Region 2 Advocate for the SBA Office of Advocacy, representing small businesses in New York, New Jersey, Puerto Rico and U.S. Virgin Islands. Myers works with small business owners, state and local governments, and small business associations to bring the voice of Region 2 to Washington DC. She can be reached at Christine.myers@sba.gov.