You could say the same thing about minimum wage, safety and environmental regulations, child labor laws, workers taking weekends, etc.

At some point, as a society we set a minimum bar on what kind of successful businesses we want to employ people. What that minimum bar is can be debated, but "more businesses will fail" is not exactly a straightforward indicator of the value of a regulation.

Plus, certain types of labor laws, particularly those around leave, only apply to businesses above a certain size.