What Your Small Business Client Should Know About a PEO
December 2007

When counseling our business clients, we should be aware of the often overlooked fact that they will be confronted with the economic and operational burdens of having to comply with various state and federal regulations. The financial reality of regulatory compliance costs on a small business can be devastating. As recently as 2005, small businesses--those with less than 500 employees--paid a disproportionate share toward regulatory compliance, up to $5,511 per employee. W. Mark Crain, The Impact of Regulatory Costs on Small Businesses, for the SBA Office of Advocacy, September 2005. That amount is comprised of compliance with economic, workplace, environmental and tax regulatory schemes. Id. If a business has 20 employees or less, then the cost of compliance skyrockets to $7,647 per employee. Id.

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