GUEST EDITORIAL
By Benjamin Domenech, The Heartland Institute
You may have heard that in reaction to President Barack Obama’s health care law, small businesses and franchises are considering shifting employees to part-time work. The Darden Restaurant group is the latest company to attract attention for this, responding to the requirement to cover full-time workers by shifting existing workers to 28 hours per week:
In an experiment apparently aimed at keeping down the cost of health-care reform, Orlando-based Darden Restaurants has stopped offering full-time schedules to many hourly workers in at least a few Olive Gardens, Red Lobsters and LongHorn Steakhouses.
Darden said the test is taking place in “a select number” of restaurants in four markets, including Central Florida, but would not give details. The company said there has been no decision made about expanding it.
In an emailed statement, Darden said staffing changes are “just one of the many things we are evaluating to help us address the cost implications health care reform will have on our business. There are still many unanswered questions regarding the health care regulations and we simply do not have enough information to make any decisions at this time.”
Analysts say many other companies, including the White Castle hamburger chain, are considering employing fewer full-timers because of key features of the Affordable Care Act scheduled to go into effect in 2014. Under that law, large companies must provide affordable health insurance to employees working an average of at least 30 hours per week.
If they do not, the companies can face fines of up to $3,000 for each employee who then turns to an exchange – an online marketplace – for insurance.
“I think a lot of those employers, especially restaurants, are just going to ensure nobody gets scheduled more than 30 hours a week,” said Matthew Snook, partner with human-resources consulting company Mercer.
The uncertainty created by Obama’s health care law almost certainly impacted the economy in negative ways, and it continues to do so in an environment where it makes more financial sense to cap employees at a maximum number of hours – effectively forcing them to work two jobs. And how has the Obama administration responded to this? By announcing quietly that they’ll delay releasing employer mandate regulations, which include all the new rules employers will have to follow, until after the election.
Treasury and IRS later this fall will publish regulations to implement excise tax penalties that could be assessed on certain employers under the Affordable Care Act, a White House adviser says. Elizabeth J. Fowler, special assistant to the president for health care and economic policy at the National Economic Council, says the rules would not be ready for publication until after the November elections. Fowler says the regulations will address three questions of concern to employers that are subject to potential excise tax penalties under tax code Section 4980H, which was added by ACA. The key questions are who is a full-time worker, what is affordable coverage, and how does an employer determine whether its health plan satisfies ACA’s minimum-value standard, Fowler says at a conference sponsored by the American Bar Association’s Joint Committee on Employee Benefits.
All these questions still need answering, and employers are increasingly frustrated by a climate where their options are limited and hours have to be cut back to avoid penalties. Well, it could be worse, as Mickey Kaus points out, “At least the recent BLS data didn’t show a massive increase in involuntary part-time employment. … Oh, wait.” Be prepared to be more like France, and soon.
