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Study: Excessive Regulation Costs Thousands of Massachusetts Jobs

Posted by Christopher Geehern on Mar 3, 2011 2:10:00 PM

Excessive business regulation deprives Massachusetts of more than 26,000 jobs and 1,655 business starts each year, according to a study released yesterday by the U.S. Chamber of Commerce.

State RegulationMassachusetts is among 15 states to earn a “poor” ranking on labor and employment-law issues in the report, entitled The Impact of State Employment Policies on Job Growth: A 50-State Review. The study contends that the mandatory treble damages law in Massachusetts, restrictions on access to the criminal records of job applicants, and other issues inhibit the ability of the commonwealth to compete nationally and create economic growth.

The Chamber report concludes that states such as Massachusetts could boost job growth and encourage the formation of new businesses by creating a less burdensome regulatory climate.  The organization says it does not advocate the elimination of important employment laws, but rather elimination of the duplicative rules that states often pile on top of accepted national standards.

Release of the study came as Massachusetts announced that its unemployment rate remained unchanged in January at 8.3 percent, half a point lower than the national average.

The U.S. Chamber study features an “Employment Regulation Index” measuring the extent of labor and employment regulation in each state, based upon 34 characteristics related to employment (including treatment of covenants not to compete, existence of state minimum wages in excess of federal, and the existence of right-to-work laws). States were then placed into one of three tiers  -  “Good,” “Fair,” and “Poor” - based on their level of labor and employment regulation.

The report attributes Massachusetts’ poor ranking to several factors:

  • Extensive restrictions on pre-hire background checks;
  • Wide-ranging state employment discrimination laws beyond federal requirements;
  • Extensive wage-hour regulation beyond federal requirements;
  • Presumption against independent-contractor status and aggressive enforcement;
  • Three-hour reporting pay requirement;
  • Prevailing and living wage laws; and
  • Notice payment law that can require severance for change in control.

Read the Chamber study here.

Topics: Regulation, Associated Industries of Massachusetts, AIM, Employment Law

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