You can find a blog post I wrote for Howard's site and if you want to listen….You can tune in and hear it…WARNING--we went on a long time… but for anyone wanting to hear two guys with over 90 years of combined management and leadership knowledge bat ideas back and forth, go for it.
Small Matters: A mountain of regulations deters job creation
Hiring the first employee can be so costly that many entrepreneurs never do it. They prefer to stay in solo businesses, which number more than 10 million in the United States. A brief summary of the regulations involved makes it clear why many decide not to become an "employer." My electrician refuses to have an employee, citing the regulatory and tax hassles he would have to endure. Here's what he is talking about.
Once a candidate accepts a job offer, the Fair Labor Standards Act kicks in, regulating minimum wages, overtime pay, and child labor. Seventeen states have their own minimum wages, including Pennsylvania and New Jersey.
Of course Workman's Compensation Insurance must be initiated. Then there's the I-9 form and the W-4 (Withholding Allowance Certificate), the FICA (Federal Insurance Contribution Act) tax to compute and file on the Form 941 and Form 940 (Federal Unemployment Tax Act). Owners should know OSHA requirements, because an inspection could occur (and states may have parallel laws).
Record keeping starts with 10 employees. Owners must make sure that all appropriate posters are prominently displayed. And new stuff continually comes along, prescribing all sorts of obligations for firms that have become instruments of social policy, not creators of jobs and wealth.
A firm would not have to expand by much to require attention to even more rules, including Title VII of the Civil Rights Act of 1964, the 1975 Pregnancy Discrimination Act, The Age Discrimination in Employment Act, the American's With Disabilities Act (employment sections), the 1986 Immigration Reform and Control Act, and the Genetic Information Nondiscrimination Act of 2008. The federal government cannot possibly manage business in a manner that is sensitive to the varying circumstances of the economy.
Even worse, the political "managers" have little if any business experience at all and are heavily influenced by lobbyists. Federal rule-making is by necessity "macro" in nature, applying to businesses in all 50 states uniformly. Attempts to do otherwise create widespread confusion and inequities. Congress sometimes seems to be in the business of granting exemptions. The Affordable Care Act, aka the health bill, is a case in point. Passed by Congress to apply to everyone and every business, more than 1,700 "exemptions" have already been granted, and more will undoubtedly be handed out.