The amount of time company directors spend on regulation-related paperwork went up from 13 to 17 hours a month last year, according to a new report.
The Institute of Directors said the cost of dealing with the regulatory “burden” was £36.8 billion in 2010, up from £28.2 billion in 2009.
Miles Templeman, the IoD’s director general, said: “Instead of building up their businesses and creating new jobs, the UK’s entrepreneurs are spending over a month each year handling Government red tape.
“Some of this burden has to be lifted if we want the private sector to grow and create jobs to offset redundancies in the public sector.
“Significant deregulation of employment law must be on the agenda. We know this is contentious, but we’ve reached a point where excessive red tape is stopping many micro-businesses from taking on their first employee. This doesn’t benefit anyone.”