Compliance April 9, 2001

Regulations Impose $90 Billion Burden on Employers

September 4, 2001 (PLANSPONSOR.com) -US government regulations cost employers about $91 billion each year, with occupational safety and health regulations accounting for more than half that total, according to a new report.
Reported by

The Mercatus Center, a research group at George Mason University, found that employers spend roughly $41 billion per year to comply with occupational safety and health rules — nearly five times the government’s $7.4 billion estimate of OSHA compliance costs, according to the Bureau of National Affairs.

Range Reference

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The report considered 25 different categories of regulation, assessing high and low estimates, as well as “best estimates” of the cost of the regulations. Consequently, workplace regulations could cost as much as $134.4 billion or as little as $51.9 billion per year, according to the report.

Those estimates include the direct costs of complying with regulations, as well as “transfer payments,” including things such as a job loss that results from compliance. However, indirect costs, such as price increases, were not included.

Categorical Costing

Other cost categories included:

  • $18.5 billion – Employee benefits, a category that includes rules governing health and pension benefit packages. A large component is health insurance portability, which the study says costs about $12 billion per year.
  • $12.2 billion – Employment decision laws, a “catchall” category that includes costs incurred from the Employee Polygraph Protection Act, the Immigration Reform and Control Act, and the Worker Adjustment Retraining and Notification Act.
  • $6.6 billion – Civil rights, a category that includes litigation risks imposed by civil rights laws on employers. The survey’s authors say that all but $10 million of the costs estimated in this category come from rules promulgated under Title VII of the 1964 Civil Rights Act and the Americans with Disabilities Act.
  • $4 billion – Labor-management relations, including compliance with the National Labor Relations Act and the Labor-Management Reporting and Disclosure Act.
  • $1.2 billion – Labor standards, including compliance with regulations that control wages for certain groups, such as the Davis-Bacon Act and the Service Contract Act.

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