According to the previous version of the German disability law, six percent of all jobs in an establishment had to be occupied by disabled employees or the firm had to pay a penalty of 200 DM per month for every job under consideration. This paper reports some results of the first econometric investigation on the impact of this law on job dynamics in small firms. Based on data from the IAB Establishment Panel we find no clear-cut evidence that employment growth in establishments at the first threshold of the law (i.e. 16 employees) is significantly different from that in establishments below of above this threshold.