Small Firms Pay Most to Comply
This and other revelations can be found in a study compiled at the Mercatus Center at George Mason University. Some 100 members of the National Association of Manufacturers (NAM, Washington) were surveyed. Respondent firms ranged in size from seven employees to 65,400 employees.
The survey covers 25 statutory acts and executive orders that represent all significant federal workplace regulations, including worker health and safety, labor standards, employee benefits, labor-management relations, civil rights and employment decisions.
The findings did not surprise Patrick Cleary, NAM senior vice president. "Manufacturers have known for a long time now that costly, outdated and often counterproductive regulations are a serious drag on the U.S. economy," he says. "While we clearly don¿t advocate a regulation-free workplace, the facts of this latest study show that regulations come with a steep price tag. Lawmakers need to exercise extreme caution before piling on even more."
The study also finds that the regulatory burden falls disproportionately on small manufacturing firms that employ fewer than 100 workers. The total compliance cost at small firms is about $2,500 per employee, which is 68 percent higher than the cost per employee at large firms with more than 500 workers.
The two most costly categories are related to worker health and safety regulations, which account for about one-third of the compliance costs, and regulations related to employee benefits, which account for about one-fourth of the costs. Firms paid $567 per employee to comply with worker health and safety regulations, and $468 per employee to comply with employee benefit regulations.