Businesses must be prepared for new regulatory requirements, but it can be difficult to stay up-to-date with constant developments. Change comes from many directions, including municipal ordinances, agency rulemaking, federal and state legislation.
Maine legislators enacted over 500 bills in 2021, with over 400 new pieces of legislation going in effect this October. Rates of regulatory change reached new levels in response to COVID, with rapid modification of municipal policies, legislation, executive orders and department rules.
Preparation is Key
Business viability increasingly depends on whether one is able to effectively adapt to rapidly evolving regulatory requirements.
Regulations can determine business practices by restricting scope and scale of operations, locations, distribution, packaging, technology, and marketing, expanding recordkeeping, reporting, employment, or licensing standards, mandating updated health and safety practices, and creating penalties for failure to comply with new requirements.
Uncertainty resulting from rapid change has created significant challenges for small businesses and organizations seeking to maintain balance in constantly shifting regulatory terrain.
The first notice many businesses receive of regulatory change comes upon renewing a state or municipal license, with updated applications listing new reporting requirements, fees, or limitations on operations. With deadlines to meet and little advance planning, businesses must rush when determining how to maintain day-to-day operations. It can take many months to implement changes necessary to maintain compliance.
Understand Media Limitations
An increasing number of business owners depend on social media for information on regulatory changes. The telephone-game effect of social media communications can promote a collective misunderstanding of how law-making processes work and of how regulations are implemented. Important details of policy changes are lost in one-line postings.
Social media portrayals of 2018 federal legislation to revise the classification of hemp drove a gold-rush mentality that resulted in thousands of people investing in large-scale hemp and CBD-production and processing businesses. Most of the new businesses became untenable within a year due to restrictions on the marketing, licensing, and distribution, resulting from federal and state agency rule-making. These mistakes could have been avoided if professional guidance had been obtained prior to making costly business decisions.
Newspapers, radio, and tv are similarly limited in their ability to provide comprehensive information on regulatory changes. Unless there is an organization with a PR budget promoting or opposing a specific policy change, legislation and rulemaking are rarely featured in mainstream news. Hundreds of regulatory changes each year are adopted while receiving no media coverage, though industry-specific news sources can provide more in-depth coverage of policy changes.
Monitor Regulatory Processes
Business owners are responsible for staying up-to-date on regulations impacting their operations. Monitoring policy developments affecting your business is key to being prepared.
Most legislative committees and State agencies maintain email lists for interested parties. It is worthwhile to subscribe to lists of committees and agencies developing policies that may impact your business. Department websites (DACF, DAFS, DEP, DOT, DHHS, OSHA, DOE, EPA, FDA, etc.) provide information on agency rule-making processes, though finding specific information can take significant digging and frequent monitoring of the sites for updates. Maine legislativecommittee and agency rulemaking calendars and mailing-lists can be found at maine.gov.
Municipal ordinance changes can impact day-to-day operations of a business at least as much as federal and state policy revisions. Monitoring calendars and websites of any localities where you are operating can help you stay informed of hearings, committee meetings, and ordinances, though accessibility and timeliness of posted content varies between municipalities.
Participate in Professional Associations
Many professional and industry associations provide advocacy on legislation and rulemaking impacting members and valuable updates through newsletters, networking, and workshops. By joining and participating, you can draw organizational attention to concerns about proposed regulations impacting your business that may otherwise go unnoticed.
While most large businesses invest in regulatory compliance services and expertise necessary to keep up with evolving government policies, many small businesses are unprepared for new regulatory requirements. The cost of attempting to comply at the last minute with unexpected regulations can be significantly more than the cost of obtaining professional guidance prior to making major business decisions.
The work necessary to be prepared for regulatory change is time-consuming, but essential for long-term business viability. A regulatory compliance expert knowledgable in local, state, and federal regulatory structures can review current business practices and help you develop a plan to successfully adapt to changing regulations.
About the Author
Hillary Lister is a solo practitioner providing professional guidance for small businesses and organizations seeking to effectively navigate Maine's changing regulatory landscape.
Hillary can be reached at email@example.com.