Chinese enterprises generally bear a certain degree of policy burden, and the impact of policy burdens on business operations is an important research topic in academia. From the perspective of audit fees, this paper uses the data of A share non financial listed companies in Shanghai and Shenzhen Exchange from 2007 to 2018 to examine the negative effects of policy burdens represented by redundant employees. The study found that the higher the redundancy employees of the enterprise, the higher the audit fees charged by the auditor. Earnings downside risks, rising agency costs and increased earnings management are the three channels that lead to these effects. Further research shows that the positive relationship between policy burden and audit fees is affected by the degree of labor protection. The positive relationship between policy burden and audit fees is stronger when the degree of labor protection is greater. The impact of policy burdens on audit fees is more pronounced in state owned enterprises. In addition, the increase in audit fees for policy burden is due to both the auditor’s increased audit investment and the risk premium component. The research results show that the policy burden has obvious negative effects on the enterprise, and the decision made by the auditor considers the negative impact of the policy burden on the business operation.