One of the first casualties of Obamacare could be the 40-hour workweek for some employees. Even the 30-hour week could be in danger in some industries, as companies pare back hours to avoid providing health insurance for part-timers.
Among all the possible business side effects of Obamacare, the increased trend toward part-time work could be one of the biggest. It’s already happening, and the employer rules of healthcare law don’t even kick in until 2014.
“I think there is a very large incentive for that to happen,” said Rob Glus, a consulting actuary and chair of employer benefits adviser Conrad Siegel in Harrisburg, of the shift to part-time work.
Under Obamacare, companies, regardless of their size, do not have to provide health coverage or pay a penalty for employees who average less than 30 hours a week.
And while no one is talking about scaling back accountants’ hours or shifting engineers to part-time status, there are plenty of other lesser-skilled, lower-wage employees who could see work hours slashed.
“It depends on the employee group,” said Glus, who advises companies with 100-plus employees across Pennsylvania on their benefit packages.
“That’s exactly the analysis employers are going through right now,” he added. “That’s your cost implication now.”
It could set the stage for a two-tiered employment system, with only skilled workers enjoying full-time work and benefits — while many others are shunted to part-time status.
Worse, these part-timers would have their work hours strictly limited to avoid hitting the 30-hour weekly average at which Obamacare’s mandates would kick in, experts said.
More workers working less hours and taking home more paltry pay. Is this the economically unappetizing, though unintended consequence of Obamacare?
“You just make sure they don’t work 30 hours a week,” Glus noted. “That is a very real decision. That’s exactly what is happening with employers right now.”
Indeed, the national eatery chain Darden Restaurants, which operates Red Lobster and Olive Garden, announced similar plans to scale back employee hours to avoid Obamacare.
Asked if some employees faced work reductions to as little as 20 hours or so in order to keep clear of the 30-hour weekly average, Glus conceded it was possible.
“I don’t know that I can make a blanket statement about how far people are being cut back,” Glus said. “But people are being cut back, or they will be cut back.”
Indeed, one inevitable result of Obamacare appears to be more part-time jobs. Perhaps, a lot more.
That’s because as companies scale back worker hours to avoid hitting the 30-hour weekly average, they will have to hire more part-timers to pick up the slack and keep their businesses running.
“What I want to do is change my hiring practices so those employees don’t work as many hours,” Glus said, describing the current Obamacare-inspired thought pattern of many employers.
Already, the recent recession has reduced the ranks of full-time workers and pushed more people into the economic limbo of part-time employment. Now, a key provision of the health care law appears poised to turn that shift to part-time employment into a stampede.
The result: More workers working less hours and taking home even more paltry pay. Yet this could be the economically unappetizing, though unintended consequence of Obamacare, according to many business experts.
So what do you say? How will Obamacare impact business and the economy? How will it affect your company? What will it mean for your job?
Through Wednesday, PennLive will be exploring the possible economic ramifications of Obamacare in full detail. We’ve reached out to area business leaders, statewide business groups, healthcare insurance companies and healthcare providers. And we’ll be sharing their views on Obamacare in a series of posts targeting specific business issues raised by the health care law.
But we want to hear from you, too. Especially if you own a mid-sized company or a small business. How will Obamacare impact your business decisions?