WASHINGTON | Wed., May 30, 2012 5:22am EDT (Reuters) — Small businesses hired fewer workers in May and cut hours for those on their payrolls, an independent survey showed on Wednesday, raising prospects of another disappointing employment report.

Businesses added 40,000 new jobs, after increasing payrolls by an upwardly revised 60,000 jobs in April, according to Intuit, a payrolls processing firm. April's job count was previously reported as 40,000.

The survey's findings contradict expectations of a pick-up in job gains in the broader economy this month as the weather-related distortions that held back employment growth in March and April dissipate.

The government's closely monitored employment report due on Friday is expected to show that payrolls rose 150,000 in May, according to a Reuters' survey, increasing from April's meager 115,000 jobs. The unemployment rate is seen steady at 8.1%.

The Intuit survey showed the average workweek for small business employees slipped 0.13% in April, leading to a 0.13% or $4 decline in the average monthly pay to $2,692.

But that is equivalent to an annual salary of $32,300, meaning that many of the small business employees are working part-time.

The Intuit survey is based on responses from about 78,000 small businesses with fewer than 20 employees that use the Intuit Online Payroll system. It covered the period from April 23 to May 23.

(Reporting By Lucia Mutikani; Editing by Leslie Gevirtz)

© 2011 Thomson Reuters. Click for Restrictions.

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