Small Firms Pay More to Comply with Disability Law

New data from the Small Business Administration reinforces earlier findings that small businesses pay more than large ones when it comes to complying with disability law.

Before signing a lease or buying a building to set up shop, any small firm should consider whether its new space will need alterations like a wheelchair ramp or a crosswalk to comply with disability law. Just because a small firm signs a lease doesn't mean that its landlord will be responsible for these things, as I reported earlier.

The new study (pdf) from the SBA's Office of Advocacy reiterates that most small businesses are likely to be renters and they should "understand that they are equally liable for the costs and the legal liability that stems from the architectural barrier removal requirements."

The 54-page report said the higher cost for a small business per square foot or per employee is largely based on the fixed cost of most barrier removal projects. An average small restaurant would spend about $82,000 to comply with architectural barrier removal while a typical small doctor's office in a hospital may spend about $275,000.

Typical small firm building costs are about two to four times greater than large firms in the same industry, according to the study. A 2005 Office of Advocacy study concluded that small businesses paid nearly 1.5 times as much per employee as large firms when complying with regulations

The SBA office submitted the findings of the new report, conducted by E.H. Pechan & Associates, to the Justice Department as it mulls over amending the requirements for barrier removal.

The Americans with Disabilities Act says small business must comply if getting rid of architectural barriers is "readily achievable," which is defined in the law as "easily accomplishable and able to be carried out without much difficulty or expense."

Many small businesses have expressed concern to the SBA and elsewhere that the "readily achievable standard" is vague, difficult and expensive to follow because of the Justice Department's lack of guidance on what constitutes a barrier and what kind of barrier removal is readily achievable. There is no requirement to remove barriers if the business is not open to the general public.

Small Business Readers - Do you think small businesses should get a break on complying with these parts of disability law because of the cost? Or should the law at the minimum be clarified so that small firms can better understand what is legally considered "readily achievable?"

By Sharon McLoone |  December 3, 2007; 3:25 PM ET Data Points
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Please email us to report offensive comments.

The cheapest "readily achievable" barrier removal is the removal of attitudinal barriers. If we insist on focusing on the prohibitive costs, none of us are going to get anywhere.

Of course the same modifications will cost more for small businesses if we're analyzing by square foot or by number of employees. But why should these be our only units of analyses?

Small businesses also have some advantages here:
- they can take advantage of a tax credit every year (on top of the tax deduction offered to all businesses).
- "readily achievable" takes into account profit, total organizational budget, etc.

And for all businesses, large or small, barrier removal can be a gradual process (depending on funds, etc.).

Honestly, the public accommodations I truly feel the most for are the non-profits who operate on shoestring budgets and do not benefit from the tax credits or deductions. But even in these situations, change can be gradual - and many changes are free or low cost.

Posted by: Robin Christensen | December 4, 2007 2:32 PM

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