Removing the Red Tape on Regulatory Waivers

Enabling Small Businesses to Opt-Out of Bad Regulations

In many states, businesses face rigid rules and regulations that may not always make sense or apply to their specific type of work.

Sometimes, businesses can apply for waivers when rules aren’t helpful—or are downright harmful—to them. But, too often, waiver processes disproportionately favor large, powerful corporations with the resources and connections to navigate harsh bureaucratic landscapes. Worse, some states lack any sort of robust waiver process to provide businesses with much-needed relief.

Moreover, government agencies rarely reflect on their waiver decisions when considering whether to renew, update, or eliminate regulations. This effectively reduces waivers to a band-aid solution that does nothing to address their initial necessity.

There are four measures states should take to leverage the waiver process toward a more business-friendly regulatory environment.

1. Empower Innovators: Allow businesses and entrepreneurs to easily request waivers from regulations that are too costly, do not apply to their specific circumstances, or that would harm their business while not offering meaningful protections to the public.
2. Agency Accountability: Require agencies either to grant a waiver request or rigorously defend their decision to reject it.
3. Implement Automatic Waivers for Similar Businesses: When a waiver is granted, it should automatically apply to all similar businesses, preventing selective favoritism and ensuring fair treatment across the board.
4. Regulatory Reflection: Mandate that agencies consider the deletion of a regulation or the issuance of universal waivers whenever a waiver is granted, prompting a reevaluation of the regulation’s relevance and effectiveness.

With those measures enacted, regulators would be forced to consider whether their regulations serve the public good. That gives every entrepreneur and small business owner a better chance at success.