While business laws and regulations are meant to protect consumers and preserve market rules, some states have much tighter restrictions than others. Regulations include employment and labor laws, minimum wage regulations, family leave regulations, occupational licensing rules, and many more. All these laws are employed with varying degrees of strictness based on your state. This list will cover six states with the least amount of business regulations, making them excellent places to start a new business. Then, we’ll be going over the six most strict states in the country in terms of business regulations.
Least Business Regulations
Image Credit: Shutterstock. Here are the six states that make it the easiest to start a business with a lack of unnecessary business regulations and red tape.
1. Indiana
Image Credit: Shutterstock. One of the best states to start a new business, Indiana takes the first spot for the most minor business regulations in the United States. With low start-up and annual filing costs, coupled with a WLURI Land Use Score of -1.01, indicating deficient land regulations, this state imposes less strict laws. It also requires no short-term disability insurance and only needs 14.9% of the workforce to be licensed.
2. North Dakota
Image Credit: Shutterstock. The state of North Dakota is ranked second on the list, where companies are legally obligated to pay $0.88 per $100 of payroll to workers as compensation. Businesses here require 26.6% of their workforce to be licensed, with a WLURI Land Use Score of -0.54, showcasing minimal land use regulations. No short-term disability insurance is required.
3. Texas
Image Credit: Shutterstock. With minimal land use regulations, Texas takes the third spot, earning a WLURI Land Use Score of -0.45. Other rules include a worker compensation of $1.61 per $100 of payroll and a minimum wage of $7.25 per hour, one of the lowest in the country. Texas demands 24.1% of the company workforce to be licensed.
4. Kansas
Image Credit: Shutterstock. Kansas has the state’s fourth most lenient business restrictions, with only legal worker compensation amounting to $1.55 per $100 of payroll and unemployment insurance of 0.84% of total wages. There is no short-term disability insurance, and only 56 job categories require an occupational license. The state has the least restrictive land use laws, earning it a WLURI Land Use Score of -1.13.
5. Georgia
Image Credit: Shutterstock. Coming in fifth is Georgia, which requires unemployment insurance of 0.41% of total wages. The minimum wage here is $7.25 per hour, and there is regulatory flexibility for small businesses with less than 100 employees. When it comes to land use regulations, it has a WLURI Land Use Score of -0.21, which is relatively low. Companies also need to ensure that 15.7% of their workforce Is licensed, which highlights leniency.
6. Virginia
Image Credit: Shutterstock. The state of Virginia takes the sixth spot with unemployment insurance of 0.47% of total wages. Businesses are legally bound to ensure that workers get compensation of at least $1.17 per $100 of payroll, along with 17.2% of workers requiring a license within the company. The state has more free land use laws, earning it a WLURI Land Use Score of -0.19.
Most Business Regulations
Image Credit: Shutterstock. Next comes the states that have the greatest number or the strictest business regulations. Setting up a new business in these states is not for the faint-hearted.
6. Maine
Image Credit: Shutterstock. Raking sixth when it comes to strict business regulatory control, Maine requires 20.7% of workers to be licensed, with 134 job categories also requiring a license. Land use laws are strict here, earning a WLURI Land Use Score of 0.68. While there is no short-term disability insurance that is legally required, the state requires businesses to provide worker compensation of $2.15 per $100 of payroll.
5. Vermont
Image Credit: Shutterstock. Taking the fifth position is Vermont with worker compensation amounting to $2.33 per $100 of payroll. The state must also pay its workers a minimum wage of $9.15 per hour. Additionally, 16.8% of the company workers need to be licensed at any given time, and 6.5% need to be certified. It also has relatively stricter land use laws with a WLURI Land Use Score of 0.35.
4. Connecticut
Image Credit: Shutterstock. The state of Connecticut comes in fourth with an unemployment insurance of 0.96% of total wages and a minimum wage of $9.15 per hour. Companies require 24.7% of their workers to have a license, and many land use regulations earn a WLURI Land Use Score of 0.38.
3. Rhode Island
Image Credit: Shutterstock. Rhode Island ranks third when it comes to businesses being regulated. The state requires short-term disability insurance and has to pay 1.5% of total wages as unemployment insurance. 166 job categories here require a license and have stringent laws regarding land use, earning it a WLURI Land Use Score of 1.58, the second highest in the country.
2. New Jersey
Image Credit: Shutterstock. Taking the second spot is New Jersey, which has an unemployment insurance policy of 1.2% percent of the total wage. Along with strict telecommunication regulations and a staggering WLURI Land Use Score of 0.88, companies are facing a very controlled environment here. Businesses also require 20.7% of their workers to be licensed and 11.3% to be certified.
1. California
Image Credit: Shutterstock. With the strictest business regulations in the US, California has a minimum wage of $9.00 per hour, one of the highest in the country. A massive 20.7% of the workforce has to be licensed, with 177 job categories requiring licenses as well. In terms of land use regulations, it received a WLURI Land Use Score of 0.59 along with a worker compensation amount of about $3.48 per $100 of payroll. Source: Pacific Research.
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One of the best states to start a new business, Indiana takes the first spot for the most minor business regulations in the United States. With low start-up and annual filing costs, coupled with a WLURI Land Use Score of -1.01, indicating deficient land regulations, this state imposes less strict laws. It also requires no short-term disability insurance and only needs 14.9% of the workforce to be licensed.
