In Part IV of Investor’s Business Daily’s series “Small Business and Regulation,” Ty Baker-Baumann, owner of Rebsco, Inc., describes how government regulations are hurting her family-owned business in Greenville, OH.
Ty explains that small businesses incur heavy costs – and often stringent penalties – trying to stay in compliance with federal regulations. She cites one small business owner who considers paying $10,000 in fines after OHSA inspections “lucky,” since penalties can often add up to much more. As the article points out, reform is needed to shift the focus of regulatory policy from a punitive approach to one that helps small business navigate complex rules and requirements. Below is the full article:
When Labor Secretary Hilda Solis, said in 2009, “Make no mistake about it: The Department of Labor is back in the enforcement business,” it wasn’t entirely clear what she meant.
Small businesses have since found out.
IBD interviewed Monty Friebel who runs Cooper Enterprises for the first part in this series on small businesses that struggle with government regulation. During that interview Friebel said:
When I first got involved, the (Occupational Safety and Health Administration) would come in and point out things that were not correct. They’d issue citations but there were no fines associated with it. They’d give you time to take corrective action and if it met their satisfaction that was the end of it. Today they come out and they fine you first. You still correct it, you demonstrate to their satisfaction that it is corrected and you still get to pay the fine.
“That’s the feedback I’m getting from our customers,” said Ty Baker-Baumann, who runs Rebsco, Inc. in Greenville, Ohio. “We belong to some different business associations and when I talk to the directors of those associations that’s what they’re hearing from their members pretty consistently.”
Baker-Baumann is a second-generation owner of Rebsco, which provides design, engineering, fabrication and installation services to businesses such as agriculture, asphalt and aggregate (stone and gravel used in construction). Rebsco has about 20 employees.
She relayed two stories about regulations that harmed two businesses she worked with. The first was an aggregate business that had closed down temporarily. The owner posted a sign out front that explicitly said that the business was closed temporarily.
But an inspector from the Mine Safety and Health Administration fined the business for closing down permanently without notifying MSHA.
“Now they have to go through all the hoops with the regulators and dealing with the fine and trying to appeal it,” said Baker-Baumann. “That costs a lot of time and energy at a time when this business owner should really put his energy into selling product, not dealing with a regulator.”
In the other instance, a small feed and grain facility in the area was visited by an OSHA inspector in August.
“The owner’s comment to me was, ‘If I can get through an OSHA inspection with $10,000 in fines or less, I feel lucky,’” she said. “He could be using more productively to make an improvement or pay for health insurance. Instead, he’s paying a fine, but for what useful purpose?”
She states that this more adversarial relationship between regulators and business began with the current administration.
“It’s a very anti-business climate. When you see all the new regulations coming out of the Department of Labor, it doesn’t give you the sense that business is highly valued.”
She thinks that most small-business owners want reasonable regulations that promote safety and are cost-effective.
Nevertheless, she said:
From a small business owner’s perspective, the proliferation of regulations and enforcement hit small businesses more heavily than a larger corporation. Your fines tend to be a bigger part of your profit margin, and if you really can’t see the cost-benefit in it, it’s a struggle. Further, small business owners wear many different hats. They do sales, human resources, marketing, operations, accounting and so on. The burden of regulatory compliance also falls on those same shoulders. I can’t go out and hire someone to go through all the information out there and help me figure out what new regulations are coming down the pike that I have to tend to. No small business owner can do that. So we would greatly benefit, as would our employees and our communities, with a regulatory environment that is more thoughtful, more supportive, and more conducive to a partnership.
The post “Small Business and Regulation” Part IV: Rebsco, Inc. appeared first on Small Businesses for Sensible Regulations.