What could be worse than deregulation? Believes corporate America, it can be worse only the situation in which the government changes direction so quickly that businesses do not have time to keep up with his decisions.
Companies should always be aware of changes to labour legislation. But compared to the Obama administration at the trump the cost of these changes has increased dramatically, and suffered from it in the first place small businesses.
Kronos Workforce Institute recently conducted a survey of more than 800 leaders of the various American companies. More than half believe that each regulatory change in the average costs their organization $100 thousand, More than two thirds say that in the past year the compliance and regulations has become more costly, and 74% said that compliance with regulations is more expensive than ten years ago.
Under the current administration, 64% of respondents expect that the complexity of compliance with labour standards will be more difficult and only 14% expect less complexity in the process. These costs can be a barrier to growth and will be a burden in the process of dismissal of workers, in addition, it will create additional stress for HR professionals who have to react to changing situations.
The study also showed that half of enterprises declares that they are not given enough time to prepare for changes in labour legislation. Preparation of revisions can take anywhere from 60 to 90 days, then they are accepted at the legislative level, and organizations must immediately implement new standards. Half of the surveyed business leaders stated that they need 120 to 150 days to prepare for the changes adopted at the legislative level.
Currently, more than thirty bills were adopted at the legislative level, and most of them are focused on labour standards. Most of these new laws supersede the rules of the period of the Obama administration, and, in spite of that, the companies have to bear certain costs. Although these laws look like they will save money through deregulation, in fact the opposite occurs. The cost of regulatory changes covers a wide range of activities, including consultation with legal advice, training for personnel and wage and informing about the changes.
And if employers have to spend time to time to react to the changes, they have less time to communicate with customers and increase profits.
Over the past few months there have been several key changes. First, the White house has just announced that it will cancel the decree, according to which companies need to report on workers ‘ compensation on the basis of race, gender and ethnicity.
Second, trump has approved the cancellation by Congress of a rule that allowed States to create a pension plan for private sector workers. Thirdly, he signed a bill repealing the law under which employers must record injuries in the workplace.
Finally, he eliminated the rule that government contractors must disclose previous violations of labor laws.
All of these changes in legislation can result in serious financial burden for companies that report that it simply can not cope. More than half of respondents report that they have witnessed as their colleagues from time to time trying to circumvent the rules. And in this case, the company can be fined, forced to pay a certain amount over your original costs. Only larger companies have HR departments large enough to quickly cope with the changes.
And if large companies have enough reserves to cope with the changes in the system of regulation, that small businesses really suffer. Because their overhead is distributed mainly on the labor force, they have to make tough decisions about compliance with the rules and operating costs. Research Small Business Administration found that small firms spend 80% or more per employee on compliance with the changes compared to large enterprises. In many cases, the CEO himself has to respond to new strategies and make changes across the organization, rather than focusing on the growth of their company.
President trump is often unpredictable, so it is almost impossible to predict what will be the next change in policy in the workplace.
Richard Trumka, President of the AFL-CIO and other business leaders, there is no doubt in the future, non-transparent changes in labor legislation. Since the administration trump continues to pursue deregulation, it is likely that the cost of business will increase and American workers will experience the brunt of this impact.
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