Will Obamacare Lead to a Part Time Nation?

Darden Restaurants, parent company of restaurants like Olive Garden and Red Lobster, is experimenting with limiting the hours worked by some of its employees to see if it can avoid provisions of the Affordable Care Act (ACA) – a.k.a. Obamacare – that go into effect in 2014:

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.

Darden said its goal at the test restaurants is to keep employees at 28 hours a week.

Analysts said limiting hours could pose new challenges, including higher turnover and less-qualified workers.

It would seem logical that employers would limit employees to part time status whenever possible in order to avoid fines for not providing health insurance, but on the other hand employers already spend much more than $3,000 per full time employee on health insurance – $10,522, of which the employees paid $2,204, according to the Society of Human Resource Management – so it would seem even more logical for them to stop providing health insurance altogether and lower their expenses by over 50% overnight. 

Here are some other questions:

  • How many companies, in industries that have not historically had high levels of part time employees, will start turning jobs that had been done by one full time employee into multiple positions filled by part timers? 
  • Are there provisions in the ACA that would prevent that?

 

One thought on “Will Obamacare Lead to a Part Time Nation?

  1. Curt

    Can’t blame employers for this strategy; Looks like OC will have to be adjusted to prevent this. A smart thing for employers, in my opinion, would be to reward loyal employees at the end of the year with a $2000 bonus for staying with them. At least they would be saving the $3K from going in to the bottomless pit.

    Reply

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