Date: February 21, 2017

NFIB Research Supports Reduction of Burdens on Businesses at Federal and State Levels

For Immediate Release
Contact: Sarah Tober, NFIB/Texas Communications Director
P 512.476.9847 C 512.758.9571

(AUSTIN, TX) Feb. 21, 2017 — National Federation of Independent Business (NFIB)/Texas, the state’s leading small business association, will join U.S. Congressman McCaul, State Representative Kevin Roberts, and small business owners today at the Texas Capitol in support of One In, One Out Act and HB 1290.

Roughly half of all small business owners say regulations are a “very serious” or “somewhat serious problem,” according to new research by NFIB. While regulations affect small businesses of every size, firms with 20 to 249 employees seem to be struggling the most. Among that cohort, 38 percent described regulations as a “very serious problem.” Another 26 percent said regulations are a “somewhat serious problem.”

“Small business owners are drowning in regulations imposed by every level of government,” said NFIB Executive Director Will Newton. “It’s a major problem affecting millions of businesses, and the federal government is the biggest contributor.”

“Some regulations exempt firms with fewer employees,” said NFIB Research Director Holly Wade. “Regulations are a problem for employers in every size cohort, but the pain gets more intense with more employees. This creates a clear disincentive to add jobs, and overregulation should be the first consideration for policymakers.”

Twenty-eight percent of small employers cited cost as their biggest regulatory problem. Other problems cited were: “understanding how to comply” (18 percent); “extra paperwork” (17 percent); and “time delays” caused by regulations (10 percent).

Slightly more than half of small firms said the number of regulations with which they must comply has increased in the last three years. Within that figure, 65 percent of firms with 20 to 249 employees said their regulatory burdens have increased in the last three years.

Other key findings include:

  • The volume of regulations is the largest problem for 55 percent of small employers compared to 37 percent who are most troubled by a few specific regulations coming from one or two sources.
  • One-third of small employers have had a government official enter their place of business to inspect or examine their records and/or licenses or otherwise check on their compliance with some government requirement in the last 12 months. For larger small businesses, 57 percent were visited in the last 12 months compared to 28 percent for the smallest ones.
  • Over the last three years, 41 percent of small employers have contacted a government agency for help complying with a regulation. About 19 percent of those were very satisfied with their experience.
  • Almost one in ten small employers have been fined, sued, or penalized for a regulatory violation in the last three years. Larger businesses are twice as likely to have this occur compared to smaller ones.
  • Twenty percent find that regulations affecting their business have no relevance to safety or consumer protection. Thirty-one percent find them of little or no value for customers or consumers and not worth the cost of compliance.

“In simple terms, regulatory compliance uses valuable human and financial capital, which is in short supply for small employers,” said Wade. “Regulations drain trillions of dollars from the economy and the value of many is questionable. Employers and the public are not getting their money’s worth.”

Click here to view the full report. McCaulRobertsPressConferenceAdvisory

NFIB/Texas has 21,000 dues-paying members representing a cross-section of the state’s economy from agriculture, construction, and manufacturing to wholesale, retail, and services. Additionally, NFIB/Texas membership is 96 percent comprised of businesses who have 40 employees or less and is the largest association advocating for small business in the Capitol.

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