President Obama leaves Air Force One upon arrival Nov. 30 at Andrews Air Force Base. He signed the Affordable Care Act on March 23, 2010.(Photo: Jose Luis Magana, AP)
Many businesses plan to bring on more part-time workers next year,
trim the hours of full-time employees or curtail hiring because of the
new health care law, human resource firms say.
Their actions
could further dampen job growth, which already is threatened by possible
federal budget cutbacks resulting from the tax increases and spending
cuts known as the fiscal cliff.
"It will have a negative impact on job creation" in 2013, says Mark Zandi, chief economist of Moody's Analytics.
Under the Affordable Care Act, businesses that employ at least 50
full-time workers - or the equivalent, including part-time workers -
must offer health insurance to staffers who work at least 30 hours a
week. Employers that don't provide coverage must pay a $2,000-per-worker
penalty, excluding the first 30 employees.
The so-called
employer mandate to offer health coverage doesn't take effect until Jan.
1, 2014. But to determine whether employees work enough hours on
average to receive benefits, employers must track their schedules for
three to 12 months prior to 2014 - meaning many are restructuring
payrolls now or will do so early next year.
About a quarter
of businesses surveyed by consulting firm Mercer don't offer health
coverage to employees who work at least 30 hours a week. Half of them
plan to make changes so fewer employees work that many hours.
The health care law will particularly affect companies with 40 to 45
workers that plan to expand and hire. Many are holding off so they
don't cross the 50-employee threshold, says Christine Ippolito,
principal at Compass Workforce Solutions, a human resource consulting
firm in Melville, N.Y.
Ernie Canadeo, president of EGC Group,
a Melville-based advertising and marketing agency with 45 employees,
planned to add 10 next year but now says he may add fewer so he's not
subject to the mandate. Still, he says, he'll eventually have to hire
more workers to grow. "If business demands that I hire, then I have to
hire," he says.
Others already over the 50-employee threshold
plan to add more part-time workers or cut the hours of full-timers, says
Rob Wilson, head of Employco, a human resource outsourcing firm. Many,
he says, will hire more temporary workers, whom they won't have to
cover.
Nearly half of retailers, restaurants and hotels will be
affected by the law, according to Mercer. They employ large numbers of
part-time and seasonal employees, including many who work about 30 hours
a week.
Since such low-wage workers are widely available, it
often hasn't been cost-effective or necessary for employers to offer
them coverage. Providing them benefits could be costly because employees
must pay no more than 9.5% of their wages in insurance premiums,
forcing employers to contribute significantly more than they do for
higher-wage workers.
"I think you may see employees with
fewer hours as a consequence," says Neil Trautwein, vice president of
the National Retail Federation.
Thirty-one percent of
franchisees surveyed recently by the International Franchise Association
said they plan to pare staff to get under the 50-employee threshold.
USA Today