Regulatory Relief

Date: September 07, 2016

The Issue... Regulatory Relief

NFIB has an extensive research database regarding regulatory burden — it costs small business owners $12,000 per employee, per year on regulatory costs alone, which is 36% higher than what it costs larger businesses; or that federal agencies churn out about 10 new regulations a day.

Small businesses are the backbone of the U.S. economy, generating more than half of the net new jobs in the country. They also make up half of the U.S gross domestic product. But burdensome regulations often hinder their growth. While some small businesses have trouble keeping up with a large volume of regulations, other businesses struggle to comply with just one or two major ones.
 
NFIB has long advocated for regulatory reform and sensible regulations. Despite key victories NFIB has achieved, there’s a lot more work to be done. The complicated nature of regulations means there’s no comprehensive solution to the issue. But the better policy makers understand how regulations affect business, the more equipped they are to lighten the burden.
 
As shown in the NFIB Small Business Economic Trends Survey, members ranked “Government Regulations and Red Tape” the second biggest issue faced. In the Texas NFIB Problems and Priorities Report, members ranked “regulations” as the second biggest issue as well, just behind taxes. Most recently, when the NFIB/Texas office surveyed you, members overwhelming responded that excessive regulations on the local, state and federal level create a sense of uncertainty that restrain your ability to plan for future growth. 

With that sentiment in mind, we implored legislators to think differently. Instead of trying to conjure up new tax incentives or handouts to give small business owners, we asked them to look at reducing the tax burden by eliminating the franchise tax and inventory tax and to look at reducing the regulatory burden on employers in this state. NFIB always asks legislators to “do one less thing” each session. That is, before proposing a new law creating another permitting requirement or regulation, strike one off the books first. Lastly, we ask legislators to look at the indirect cost a new regulation might have on a small business owner. By considering all of NFIB’s suggestions per the feedback of our members, the Legislature could not only help the backbone of this economy succeed but could create and sustain millions of jobs in this state, which would swell the Texas economy.

 

84th Legislative Session Results
 
Minimum Wage
12 minimum wage increase mandates were filed this session and none of them passed thanks to our strong opposition in committee when the bills were heard. NFIB/Texas made it clear that a mandated minimum wage hike would hurt small business owners and their employees in Texas, and ultimately the state’s economy. The minimum wage is meant to be a starting wage and increasing it will hurt the very people it aims to help — young, entry-level workers who will no longer have the skills to qualify for higher paying jobs. 
 
Unlawful Employment Practices
12 bills were filed this session that would have added to the definition of what an ‘unlawful employment practice’ is under Texas law, which opens an employer up to more liability and litigation. Many of the bills had to do with employer discrimination against an employee. There are already clear laws in place regarding workplace and wage discrimination, but every session legislators want to add to what would be considered ‘discrimination’ against an employee, like adding sexual orientation and gender identity to the list things that an employer cannot discriminate against. Currently employers cannot discriminate on race, ethnicity, and religion. Adding more and more to the list just adds more opportunity for an employee to file a claim and a lawyer to file a civil suit against an employer. 
 
Only one of those 12 bills filed passed, but it was also a bill that NFIB/Texas did not oppose. 
 
Wage Claims
Eight bills were filed dealing specifically with wage claims against an employer. They either would have extended the period of time for an employee to file a wage claim against an employer (from 180 days to up to 2 to 5 years), or they would have changed current law regarding the terms under which an employee can bring a claim against an employer (another that opens up the definition of discrimination or retaliation). Once again, lawyers would have had a hay day with these new laws, if passed, but NFIB/Texas opposed and lobbied against all eight bills and all eight died. 
 
Ballot Propositions
NFIB/Texas members were balloted prior to the legislation session and asked what issues are most important to them. All of the usual issues were noted as the most important: taxes, mandates, licensing, health insurance, etc. but among those issues this time were local ballot propositions to issue bonds or create a new local ordinance. Six bills were filed that would require a city or county, before issuing bonds, to state clearly on their ballot proposition to the voters what their current debt obligations are and what the estimated time to pay that off is. 
 
Another bill was filed to require the city or county, before they bring forward a measure to enact a new ordinance, to send the proposal to the Attorney General to make sure it doesn’t violate the Texas or Federal constitution or an existing state statute and determine whether the passage of the measure would cause a government taking of private property. If the Attorney General were to determine it does any of that, the city or county wouldn’t be allowed to bring the measure up for a vote. All the bills described to improve upon government transparency to the voters failed to pass. Local and County government have a very strong lobby, and they succeeded in making sure these bills didn’t pass. Government transparency will be a major issue next session indeed and NFIB/Texas will have a seat at the table. 
 
Paid Leave
Only a few bills were filed this session that would require an employer to offer an employee paid leave for one reason or another (for domestic violence, for a sick sibling, for extracurricular activities of a child or foster child), but those all failed to pass. NFIB/Texas is opposed to mandating paid leave on an employer and government getting involved in the employee/employer relationship. It should be left up to the employer as to what leave time they can and will prescribe for their employees. It’s more important that an employer is provided that flexibility to work with their staff on a case by case basis. Because of NFIB/Texas’ on the record opposition to paid leave both nationally and in Texas over the years, we’ve seen a decrease in the bills filed that would create the additional mandates. 

smallbusinessproblems_v3

Studies

Texas Problems and Priorities Survey

National Small Business Poll on Regulations

Press

  1. Small Business Stands with Efforts to Rollback Regulations 
  2. Texas Insider: compliance with regulations cost the U.S. economy $2 trillion a year and that compliance costs fall disproportionately on small businesses
  3. Representative Roberts and Congressman McCaul Press Conference
  4. Fox 7 House Democrats fight for minimum wage increase
  5. Spectrum News | small business groups agreed a hike of $10 or even $15 an hour just isn’t plausible
  6. NFIB/Texas member and leadership council member Robert Mayfield weighs in on minimum wage on NPR

See what NFIB is doing for small business on this issue nationally nfib.com/regulations

Related Content: Issues | Labor | Minimum Wage | Paid Leave | Texas

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