Small Businesses say Compliance Efforts Take up More Time

June 1, 2007 ( - Small business owners say they are spending far more time on meeting compliance requirements than they did a decade ago, a recent survey suggests.

The survey of about 430 small businesses found that these businesses are finding it increasingly more difficult to comply with the rising number of regulations, with some managers saying they are spending over a third more time on compliance than they did a decade ago.

Eighty-seven percent of companies said local, state and federal employment regulations have proliferated in the last decade. Of the companies that said employment regulations were increasing, a little more than half – 53% – said these regulations were growing faster than other types of business regulations, while 47% said they are not.

Nearly 55% said they were spending up to 10% more time doing regulatory paperwork, and 31% said it was up to 20%. A tenth said up to 30%, and 5% said they are spending over 30% more time complying with regulations.

The most respondents (38%) named workers’ compensation as the toughest employment regulation to comply with.

Reporting and paying federal income and employment taxes for employees ranked as the second most painstaking human resources chore, with 28% saying that is the case, followed by the Family Medical Leave Act (26%).

Tied for third in the survey with 26% of respondents was the complex Health Insurance Portability and Accountability Act, or HIPAA, which allows employees who change jobs access to medical coverage and ensures employees’ medical records stay private to encourage electronic recordkeeping.

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