Regulation might not have killed businesses, but deregulation might.
According to a survey from The Workforce Institute at Kronos, the constant changes to and elimination of regulations by the Trump administration are wreaking havoc on businesses, particularly small businesses. The reasons? Cost and time to comply.
A report from Nav points out that more than half of business owners surveyed say they're spending between $40,000–$100,000 just to prepare for new business regulations — and those costs can take a tidy bite out of profits. And among the businesses who track those costs — not all businesses do — these additional expenses include such activities as hiring legal consultation, the creation of new HR and workplace policy, training and education.
Recommended For You
Worse than regulation, say businesses in a report from Quartz, is "regulatory whiplash," with such rapid changes in direction that it's impossible for businesses to keep up. Although companies have always had to handle compliance with new government labor laws, the report says, "compared to the Obama administration, under Trump, the cost of these labor-regulation changes has increased dramatically and is crushing businesses, especially smaller ones."
The Kronos report finds that more than half of respondents say each regulatory change sets them back by up to $100,000 on average. More than two thirds say the past year has seen the cost of compliance rise, and 74 percent say it's more expensive than a decade ago.
And businesses are worried about the future under the Trump administration, with 64 percent saying they anticipate the complexity of labor-related regulations to increase; just 14 percent say they'll become simpler. And in the meantime, the costs are taking a toll on businesses amounting to more than just money.
Half of businesses say they aren't given enough time to prepare their workplaces for new laws. While regulation changes can take 60–90 days to become law, with organizations expected to implement them immediately, what they say they need is between 120–150 days to prepare and implement them. They also say they need more time to create and communicate new internal policies to employees after each regulatory change.
The report points out that under Trump, more than 50 bills have become law so far, with a few specifically focused on labor. While most are undoing Obama-era regulations and removing requirements for companies to take one action, they require other actions that come with a cost.
Says the report, "The cost of a regulatory change covers a wide range of activities, including consulting with a legal counsel, training for HR and payroll employees, and communicating the changes. When employers invest time in reacting to these policy changes, they have less time engaging with customers, and growing their bottom line."
Companies can't keep up — a U.S. Small Business Administration study finds that smaller firms spend 80 percent or more per employee on compliance than larger enterprises. So the small businesses that the Trump administration proclaimed help for are actually drowning in paperwork and expense.
© 2025 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
