I think the hurdles or disincentives to hire more people are more structural or inherent than they are legal.
In a lot of types of work, it's wildly more efficient to have fewer people do the work. Imagine if your development team of 5, each working 40-ish hours a week became a development team of 20, each working 10-ish hours a week. Progress would grind to a halt because most of the time would be spent on coordination. Every minute of coordination (standups, etc) is now 4x as expensive, and you probably need 4x as many minutes at a minimum. Everyone has to come up the learning curve, so your organization learns at 1/4 the speed (on an hourly basis), etc.
I can readily see how production-type work could be reasonably efficient with fewer hours and more workers, but even there, I'd still prefer to employ fewer workers, paying them more, and selecting from the top quartile of the workforce, who may be willing to trade more hours per week in exchange for a shorter working career in years.
In a lot of types of work, it's wildly more efficient to have fewer people do the work. Imagine if your development team of 5, each working 40-ish hours a week became a development team of 20, each working 10-ish hours a week. Progress would grind to a halt because most of the time would be spent on coordination. Every minute of coordination (standups, etc) is now 4x as expensive, and you probably need 4x as many minutes at a minimum. Everyone has to come up the learning curve, so your organization learns at 1/4 the speed (on an hourly basis), etc.
I can readily see how production-type work could be reasonably efficient with fewer hours and more workers, but even there, I'd still prefer to employ fewer workers, paying them more, and selecting from the top quartile of the workforce, who may be willing to trade more hours per week in exchange for a shorter working career in years.