Small Firms Struggle with Regulations

A new report shows the unintended consequences of the regulatory environment.

By Liz Webber | 
 

Even well-intentioned health and safety regulations can impact small businesses in a negative way, according to a recent study by the Kauffman-RAND Institute for Entrepreneurship Public Policy.

The study found that state health insurance mandates have not made it easier for smaller companies to offer health insurance or decrease premiums as intended. In fact, some businesses hired more employees to avoid qualifying for special health insurance rules.

"Unfortunately, some regulations place a disproportionate burden on small businesses," Susan Gates, director of the California-based non-profit Kauffman-RAND Institute, said in a statement. "At the same time, exemptions and other special regulatory treatment for small businesses designed to ease this burden don't always work."

The report recommends that new regulation focus on businesses with 20 to 999 employees, where the most fatal workplace accidents occur.

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