Many businesses plan to bring on more part-time workers next year,trim the hours of full-time employees or curtail hiring because of thenew health care law, human resource firms say.
Their actionscould further dampen job growth, which already is threatened by possiblefederal budget cutbacks resulting from the tax increases and spendingcuts 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 50full-time workers - or the equivalent, including part-time workers -must offer health insurance to staffers who work at least 30 hours aweek. Employers that don't provide coverage must pay a $2,000-per-workerpenalty, excluding the first 30 employees.
The so-calledemployer mandate to offer health coverage doesn't take effect until Jan.1, 2014. But to determine whether employees work enough hours onaverage to receive benefits, employers must track their schedules forthree to 12 months prior to 2014 - meaning many are restructuringpayrolls now or will do so early next year.
About a quarterof businesses surveyed by consulting firm Mercer don't offer healthcoverage to employees who work at least 30 hours a week. Half of themplan to make changes so fewer employees work that many hours.
The health care law will particularly affect companies with 40 to 45workers that plan to expand and hire. Many are holding off so theydon't cross the 50-employee threshold, says Christine Ippolito,principal at Compass Workforce Solutions, a human resource consultingfirm 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 notsubject to the mandate. Still, he says, he'll eventually have to hiremore workers to grow. "If business demands that I hire, then I have tohire," he says.
Others already over the 50-employee thresholdplan to add more part-time workers or cut the hours of full-timers, saysRob Wilson, head of Employco, a human resource outsourcing firm. Many,he says, will hire more temporary workers, whom they won't have tocover.
Nearly half of retailers, restaurants and hotels will beaffected by the law, according to Mercer. They employ large numbers ofpart-time and seasonal employees, including many who work about 30 hoursa week.
Since such low-wage workers are widely available, itoften hasn't been cost-effective or necessary for employers to offerthem coverage. Providing them benefits could be costly because employeesmust pay no more than 9.5% of their wages in insurance premiums,forcing employers to contribute significantly more than they do forhigher-wage workers.
"I think you may see employees withfewer hours as a consequence," says Neil Trautwein, vice president ofthe National Retail Federation.
Thirty-one percent offranchisees surveyed recently by the International Franchise Associationsaid they plan to pare staff to get under the 50-employee threshold.