The Regulatory Thicket is Out of Control

Date: January 22, 2019

Every week we talk to small business owners throughout the country about regulatory problems. Too often states make things particularly difficult for companies operating without the benefit of in-house attorneys or compliance officers. As a result, owners are pulled away from more productive tasks, and they spend inordinate time and energy sorting through regulatory requirements, and on associated paperwork.

NFIB’s Research Foundation confirms that unreasonable regulation remains a top concern for small business.  Reasonable minds can disagree whether a regulatory imposition is unreasonably burdensome or not. But reasonable minds should agree that if regulation is necessary, the state should seek to achieve its ends without burdening small business or stifling innovation and the economy as a whole.

To provide just one illustrative example, numerous states have moved to implement “ban the box” legislation that prohibits employers from performing a background check on a job applicant until after providing a tentative offer. NFIB has opposed ban the box restrictions throughout the country. But, California has gone even further to complicate the hiring process by dictating specific steps, waiting periods and notices that must go out before an employer can make a final decision on an applicant with a disqualifying criminal conviction.

Regardless of how well-intentioned lawmakers and regulators may be, the reality is that with each new imposition the regulatory thicket grows. This makes launching and running a small business all the more daunting. And while entrepreneurs are a unique breed—willing to take risks and to work as hard as is necessary to build and grow their business—they are understandably frustrated with regulatory drag.

For more on the problem of over-regulation, check-out this recently release white paper from Federalist Society’s Regulatory Transparency Project, entitled “Managing the Regulatory Thicket: Cumulative Burdens of State and Local Regulation.”

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