When well-meaning legislators pass laws they usually have no idea what might happen afterwards. Quite often laws create governmental jobs and whole departments that work hard to sustain themselves and create unintended, poor service side effects. In a minute I will share one example with you.
One way to prevent this is to have meaningful “sunset” provisions. In basic terms a law that has a sunset provision means that at a certain date the law ceases. This forces citizens, bureaucrats, and legislators to review the law’s substance and refine and tweak it or the law ceases to exist. In our business we see this with the law commonly called the Work Opportunities Tax Credit which expires every few years. Congress has to review it and choose whether to extend it or not. I do believe this is a good law that is relatively simple to administer and does have a positive impact on hiring people with disabilities. It is also a law that has not created departments of government workers that monitor and enforce it.
Unfortunately, though, this does not happen when a law or series of laws creates departments of government workers whose mission is to enforce a law.
A Current Example. We provide employment services for people with disabilities in Washington, D.C. and we have been told we are the best, most effective provider they have. The only problem now is that the size of our relatively small contract now surpasses a threshold that requires us to seek out and try to subcontract with “disadvantaged small businesses.”
And, unlike other states, they really expect us to subcontract with other small businesses to provide the very placement services our less than 10 employees in Washington currently provide. I will come back to D.C. in a moment.
We have run into this “disadvantaged small business” provision in other states before. However, because over 80 percent of our expenses go to our employees directly via salaries, taxes, benefits, mileage reimbursement, and telephone reimbursement, the only services we might buy from other small businesses might be office supplies, telephone services, or computer services. So other states have only required us to try to find small disadvantaged businesses that provided products or services “we purchased for our business.” Thus, this law has not otherwise been a problem for us, only a slight aggravation.
Last week we received notice from the government in D.C. that we had to prepare a plan for how we were going to find, solicit, and then subcontract with disadvantaged small businesses in D.C. I told our contact that the total value of our “non-employee expenses” was less than $25,000 and that I wanted to apply for a waiver. I was told I was missing the point, “It is your employees they want you to replace.”
Let me write this again – “It is your employees they want you to replace.”
The laws that were created to help small “disadvantaged” businesses had good intentions and have now created a large industry and many government departments to enforce contract equity and administration. We were a small business and are woman-owned, but have chosen not to waste our time going through the rigorous process of getting “certified,” we wanted to become successful without a special “government” designation.
So here we sit today about to make a sad business decision – If we are unable to get a waiver we will cap our services in Washington. We are not in the business of finding, managing, and assuming the liabilities of subcontractors. We help people find and retain jobs.
This is a law that needs a “sunset” discussion, but I’m afraid it is too late.