Monday, October 10, 2005

Small Firms Hit By Compliance Burden

America’s smallest firms bear the largest per employee burden of federal regulatory compliance costs, according to a recent study released by the Office of Advocacy of the SBA. Firms with fewer than 20 employees annually spend $7,647 per employee to comply with federal regulations, compared with the $5,282 spent by firms with more than 500 employees. The report measures disproportionate regulatory compliance impact on small business. The study finds that small business faces a 45% greater burden than its larger business counterparts. The report thoroughly analyzes compliance costs for economic, workplace, environmental, and tax regulations. It details regulatory costs for five major sectors of the U.S. economy: manufacturing, trade (wholesale and retail), services, health care, and other (a residual category), revealing that the disproportionate cost burden on small firms is particularly stark for the manufacturing sector. The compliance cost per employee for small manufacturers is at least double the compliance cost for medium-sized and large firms.
For more information and a complete copy of the report, visit the Office of Advocacy website at


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