Regulatory Relief on Worker Classification and Joint Employer Rules
- The Department of Labor (DOL) has issued a proposed rule that would rescind the 2024 independent contractor rule, moving towards standards set in 2021 (with modifications). This change aims to restore clarity to worker classification under the Fair Labor Standards Act (FLSA).
sbecouncil.orgSource
- The National Labor Relations Board (NLRB) has withdrawn its 2023 joint employer rule and reinstated the 2020 standard. This means joint employer status will only be established if there is "substantial direct and immediate control" by a business over essential employment terms.
- Actionable: Small businesses may experience greater flexibility and reduced regulatory burden regarding how they classify workers and manage relationships with contractors and other entities. Review your worker classification practices in light of these proposed and reinstated standards.
Small Business Innovation and Economic Security Act Passes House
- The U.S. House of Representatives passed the Small Business Innovation and Economic Security Act on March 17, 2026.
goodwinlaw.comSource
- This Act reauthorizes the Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs until September 30, 2031.
- It introduces significant changes for federal contractors, including new Strategic Breakthrough Awards focused on progressing SBIR research into production, aimed at strengthening national security and accelerating innovation.
- Actionable: Small businesses in R&D and technology sectors should investigate these reauthorized programs and new funding mechanisms for opportunities to secure federal funding and support for commercialization.
SBA Restricts Loan Eligibility for Non-Citizens
- As of March and April 2026, the Small Business Administration (SBA) has limited access to its loans, including SBA-backed loans, to U.S. citizens and nationals only.
stocktonia.orgSource
- Businesses even partly owned by a permanent legal resident with a green card are now ineligible for these loans.
- Actionable: This significant policy change may impact immigrant entrepreneurs relying on SBA financing. Small business owners who are green card holders or whose businesses are partially owned by them should explore alternative financing options immediately.
Federal Reserve Signals Support for Small Business Credit Access
- Federal Reserve Vice Chair for Supervision Michelle Bowman stated on March 31, 2026, that proposed changes to federal banking regulators' capital rules would encourage access to small business credit.
pymnts.comSource
- The Basel III and standardized approach proposals aim to reduce the "risk weight" for various small business loans, potentially freeing up capital for banks.
- For loans exceeding $1 million to investment-grade small businesses, the risk weight could drop from 100% to 65%, and for loans under $1 million, from 100% to 75%.
- Actionable: These proposed changes could lead to more accessible and affordable credit for small businesses. Monitor the progress of these proposals and be prepared to discuss them with your banking partners.
Small Businesses Grapple with High Costs and Limited Cash Reserves
- A Q1 2026 SMB Economic Outlook Report, based on a February 2026 survey, found that nearly two-thirds (62.9%) of small business owners have less than three months of cash available if revenue slows.
prnewswire.comSource
- Three in four owners (75%) report operating costs are higher than a year ago, with many describing their current strategy as maintaining stability or actively reducing risk rather than focusing on growth.
- Among those seeking financing in the past year, more than half were turned away or left uncertain about qualification.
- Actionable: Prioritize cash flow management and consider exploring diverse funding sources. Focus on cost control and risk mitigation strategies to build resilience against economic uncertainties and rising operating expenses.