Health Care Mandate for 30-Hour Weeks Won't Work for Businesses, or Workers
Eighty years ago this month, the United States came this close (insert pinched finger and thumb here) to establishing a 30-hour work week but wisely thought better of it.
Today, the president’s health care law is essentially accomplishing the same thing.
The law requires employers of any business with 50 or more full-time equivalent employees to provide at least the minimum level of government-defined health insurance coverage to those employees beginning in 2014.
However, Obamacare defines “full-time” work as averaging only 30 hours per week, rather than the traditional 40 hours per week.
That’s got small business owners like Bill Gouldin of Strange’s Florists, Greenhouses and Garden Centers in Richmond, Virginia, scrambling. In testimoney before the House Small Business Committee on April 16, Gouldin says he provides health insurance to his full-time employees who work over 37.5 hours per week but suggests that many current part time workers who will be newly categorized as full-time beginning next year will see their hours cut to less than 30 per week by their employers.
The use of 30 hours to define full-time employment is the lowest in the world and far below the common practice of 37.5 to 40 hours used by most public and private employers. There are millions of people who currently work between 30 and 36 hours per week because that works for their lifestyle and income needs…These people will be required to lose needed hours of work and income. Millions will be forced to work two part-time jobs.
Gouldin called on Congress to raise the cutoff to 37.5 hours.
My concern is that no one seems to care about the millions of employees that will lose their job in whole or in part because of this provision. Most employers have no pricing power to pass these increased costs on to the consumers so they have no options but to reduce hours or personnel. If a business tries to absorb these costs and goes out of business, everybody loses their jobs.
Meanwhile, in a truly head-scratching statement, Politico Pro and Roll Call report that HHS Secretary Kathleen Sebelius told the House Energy and Commerce Health Subcommittee that it is “impossible” to tie employers reducing employees’ hours to the health law.
“There is nothing in place right now in the legislation that would require any employer to change work hours. And we don’t think there is going to be. So whatever is happening to work hours is impossible to tie to the Affordable Care Act. Because there is no connection here in 2013.”
Check out the U.S. Chamber's employer mandate penalty calculator to determine whether you (as an employer) are required to offer coverage (which includes hours worked by part-time employees) and what the penalty might be if you don't.