Government regulation will always be present to provide a level playing field and to protect the state and its citizens. However, overregulation stifles innovation, restricts growth, and imposes burdens on small businesses. Small businesses are oftentimes at a disadvantage in navigating regulations when compared to their larger counterparts. SBAM encourages governmental restraint when enacting regulations that have the potential to harm small businesses.

To combat harmful unintended consequences of regulation, SBAM supports a Regulatory Impact Statement for all new regulations that includes a cost-benefit analysis to detail the steps taken to reduce the impact on small businesses. To allow Michigan’s small businesses to remain competitive, these regulations must also be implemented with consideration to similar regulations in nearby states and those across the county.

Recent legislative proposals seek to create one-size-fits-all mandates that do not align with how most small businesses operate. While flexibility is one of the key advantages enjoyed by small businesses, mandates that limit the use of independent contractors, require two weeks of advance for schedule changes, or prevent employers from hiring and firing at-will employees would all put small businesses at a disadvantage by restricting flexibility in various ways.

Other regulations currently under consideration would create a litany of new compliance requirements, which are specifically harmful to small businesses. While larger businesses may have the luxury of a full human resource staff and/or department, many small businesses operate with limited staff and employees that fill various roles. Policies that would increase minimum wage and benefit requirements, allow local units of government to set their own wage and labor laws, or allow the government to assess private sector jobs for fairness between employees would each make it more difficult for small businesses to keep up with their larger competitors.

In a time when small business owners face severe workforce shortages, lawmakers should avoid policies that increase financial burdens on small businesses while also contributing to workforce attrition. Proposals to increase the benefit amount and/or weeks for Michigan’s 100%-employer-funded unemployment insurance system must be avoided until significant steps are taken to reduce system fraud and strengthen the UIA trust fund.