This is the same argument that's used to justify lack of paid sick leave, lack of protections against discrimination (Title VII only applies to companies with 15 or more people), working people who don't have employer-provided health insurance, etc. Every single abuse a company can visit on its employees is magnified several times by small businesses.
It's time for the government to decide that small businesses not playing by the rules are a net negative for society and just let them go.
It's certainly consistent to say that everyone should just work for big businesses who can absorb these kinds of costs. But I think we have to acknowledge that this process, where regulations end up building a wall only big businesses can easily climb over, would be called "regulatory capture" in a different context. Government funding really seems to me like the better alternative.