No ‘Day at the Spa’ for Owner, Thanks to Uncle Sam

By Features FOXBusiness

Elaj Aveda Day Spa in Rockville, Md., may have clients in its salon seats and on its massage tables, but that doesn't mean it isn't hurting.

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Owner Lynn Bearnarth told FBN’s Lauren Simonetti that her business is suffering under government regulation, namely unemployment taxes, which have doubled from 2009's rate of $1,643 to 2010’s toll at $3,373 per employee.

"I try really hard… but the stress of running a business—people don't realize how much you have on your shoulders," Bearnarth said.

Bearnarth's said one of her biggest costs is payroll, which costs $26,000 every two weeks to pay her 22 employees. A huge chunk of that payroll total goes to unemployment taxes.

Although Bearnarth hasn't laid off any workers, she said these taxes have kept her from hiring new employees. As a result she has also stopped providing health-care coverage for her workers, she told FBN.

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Karen Harned, executive director of the NFIB Small Business Legal Center, said this regulation coupled with uncertainty has kept small businesses from hiring.

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"Business owners are reluctant to hire because they don't know what the cost of that employee will be," Harned said. "Were still seeing consumers reluctant to spend, and that has the most direct impact on our small business owners."

According to the International Spa Association, there are 5,000 spas in the Northeast and 16,300 in the U.S.

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