AXA - Be Life Confident

• Over a third of SMEs say they can't keep up with new legislation
• 38% admit that they don't review legislation as often as they should
• 11% don't believe that failure to comply with legislation will damage their business
• One in six do not understand what is expected of them under The Disability Discrimination Act
• Some SMEs could unknowingly be breaking the law

Over a third of small businesses admit that they are worried by increased legislation. Research, from AXA Insurance, reveals that 34% of businesses find it impossible to keep up, understand and implement the changes correctly and on time. A further 31% believe that new legislation distracts them from the actual running of their business. 5% went as far as to say that new legislation creates a climate of fear and uncertainty that has an adverse affect on the business.

The study also reveals that one in four businesses is not aware of the penalties for failing to comply with legislation, and 11% believe that failure to comply will not pose any risk to them. Looking at specific types of legislation, many SMEs are not aware of how it affects their business:

Doug Barnett, risk control strategy manager at AXA said: "Our research has highlighted some of the real issues that companies face when it comes to understanding and abiding by employment legislation. But despite the complexities, SMEs need to realise that failure to understand and act in accordance with legislation, particularly when we live in an increasingly litigious society, poses a major risk to their business. Put simply, if a business discriminates it can be taken to an employment tribunal and could end up paying a large sum of money in compensation to a job applicant or employee."

The Disability Discrimination Act (DDA) is a good example of where SMEs need to keep abreast of new and amended legislation. From October 2004 the old exemption for companies employing less than 15 employees was removed. Some other types of employment are now also covered by the DDA for the first time. These include police officers, fire-fighters, partners in business partnerships and employees on ships and planes.

Regardless of size, companies must ensure that they do not discriminate against disabled employees or job applicants or third parties i.e. contractors, because of their disability. Businesses are required to consider what reasonable adjustments should be made to the working arrangements and the workplace; for example by rearranging furniture to provide better access, allowing an employee to work more flexible hours and providing information in an accessible format such as large print, Braille or on audio tape.

When asked about their understanding of the impact of the DDA, 16% of SMEs believe that it poses a risk to their business and one in six say that they do not understand what is required of them under the provisions. Smaller businesses with between five to fifty employees are almost twice as likely to view this act as a risk when compared to businesses employing 51 to 250 staff.

With the Government's recent announcement to introduce more discrimination legislation with the Employment Equality (Age) Regulations in October 2006, AXA warns SMEs to ensure they are informed on changes to employment regulation because lack of knowledge could lead to them unknowingly breaking the law.

So what resources do businesses have in place for tracking legislation in order to ensure they don't break the law? 32% have a full time member of staff whose remit includes keeping up to date with changing legislation. 31% of businesses have a HR manager that sporadically checks that the company is in line with policy, and nearly 40% admit that they do not review legislation as often as they should.

AXA's website www.axa4business.co.uk offers free advice to businesses on a range of issues including developing business continuity plans. This includes a business continuity calendar which highlights everyday business risks, a business continuity guide for small businesses and 'Business 4 Tomorrow Toolkit' that draws on AXA's wealth of experience and expertise to provide small businesses with a simple and practical approach to business continuity planning.

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