I’m a Small Business. Does This Law Apply to Me Too?

My startups and smaller clients love to ask me this question. 

The answer to “Does size matter?” is for the most part pretty consistent, which is, “It depends!”

 It depends because even though there may be definitions of what a small business is, when the government puts out a new regulation, or an amendment to one, it may reason that because such new changes will have a limited impact on small businesses, that providing an exception for small businesses to compliance with the new rules is unnecessary.

Let’s take the recent amendments to the regulations for the Textile Fiber Products Identification Act (“the Rules”) as an example.

Under the Small Business Size Standards issued by the Small Business Administration, textile apparel manufacturers qualify as small businesses if they have 500 or fewer employees. 

Clothing wholesalers qualify as small businesses if they have 100 or fewer employees.

 The Federal Trade Commission’s (FTC) staff estimated that approximately 22,218 textile fiber product manufacturers and importers are covered by the disclosure requirements of these amended Rules.

While the FTC figured that a substantial number of these entities likely qualify as small businesses, it concluded that the amendments would not have a significant impact on small businesses because they do not impose any significant new obligations on them.

The FTC therefore, did not propose any specific small entity exception or other significant alternatives as it did not find it necessary to minimize the compliance burden, if any, on small entities while achieving the intended purposes of the amendments.

What do you think? Should smaller businesses be subject to less rigorous compliance requirements?

Post below or email me at clark.deanna@gmail.com

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