NFIB

The Spread of Regulations: From the Federal Government to Private Business
12/08/2003

This paper examines three controversial regulations that were originally applied to federal programs more than 30 years ago. These regulations were eventually also applied to the private sector. These regulations are the lead-based paint standards, the overtime provisions of the Fair Labor Standards Act, and the Americans with Disabilities Act.

Over time, both large and then small firms were also required to comply with these regulations. Because many small-firm owners could not understand the guidance documents and compliance guides behind the rules, they were often sued for noncompliance while operating in an environment of legal ambiguity. The result has been to increase the costs of owners of small firms forced to absorb increased regulatory costs.

This paper examines how we arrived at these impasses, and makes a few suggestions for improving regulatory implementation.