The Affordable Care Act dictates that companies with 50 or more full-time employees must provide health care coverage to those workers. Last year, employers prepared to offset premium costs by curtailing employee hours to less than 30 per week. In response, the federal government delayed implementing that requirement until 2015, creating immense market uncertainty.
Reports confirm that the number of people working grew by 2.2 million, or 1.6%, over the past year, but those at 30 to 34 hours per week shrunk. Gallup uncovered that 41% of small to medium-sized businesses, both public and private, from sea to shining sea, have frozen hiring or business development.
A year ago, Papa Johns’ CEO John Schnatter endured a boycott for explaining costs of Obamcare would pass to consumers, resulting in cut hours and costly pizza. “I got in a bunch of trouble for this, but that’s what you do, is you pass on costs. Unfortunately, I don’t think people know what they’re going to pay for this,” Schnatter told the media.
Fearing public perception of greed or callousness, most employers are keeping this data private.
Thousands of food service workers have been impacted, however, including 400 employees of Buca di Beppo, 100 Del Taco workers, an unknown number employed by Wendy’s, Jimmy John’s, Subway and dozens more.
Darden Restaurants and several Applebee’s chains are mimicking fast food counterparts. CEO of Applebee’s New York Franchise explained to Fox Business Insider, “If it’s possible to do without cutting people back, I am delighted to do it, but that also rolls back expansion, it rolls back hiring more people, and in a best-case scenario, we only shrink the labor force minimally. Best case.”
CKE Restaurants, which owns Hardee’s, Carl’s Jr., but also restaurants Green Burrito and Red Burrito restaurants employees tens-of-thousands of workers in 3,200 stores. They are now hiring only part-time workers to offset costs and uncertainties Obamacare presents to an already shaky economic recovery. Denny’s Franchises have also cut worker’s hours.
The medical device industry is uniquely impacted by Obamacare. The innovative companies that manufacture and supply crucial equipment from pacemakers to prosthetics became responsible for a 2.3% tax, which would net the government program $20 billion. In response, companies released thousands of workers and began exploring overseas options.
Stryker released 1,000 employees.
A study estimates that 360,000 people are employed by medical device manufacturers nationwide before Obamacare. 10% of the industry’s workforce, or 47,100 individuals, could be jobless when the full brunt of the mandate becomes reality.
From New Jersey to Texas to Washington and California, local governments have reduced anywhere from a handful of part-time workers to hundreds. Virginia cut nearly 3,000 workers to part time.
Not only will the significant costs threaten to swell municipal resources beyond sustainability, but the uncertainty of the law’s actual ramifications leave planners with no choice but to cut.
Florida’s Brevard County, the state’s 9th largest, must reorganize so that part-time workers did not exceed 30 hours after the 2015 deadline. Jerry Visco, the County Insurance Director, estimated that covering all 138 part-time staffers would cost $10,000 per part-time employee, or $1.38 million a year.
Dozens of school districts have shaved hours. 2000 employees of Virginia’s Chesterfield Public Schools were given a maximum of 28 hours. In Utah, the Alpine School District cut part-time hours to a maximum of 27.5 per week, avoiding passing $4.2 million in costs to taxpayers. 1000 employees were cut from Granite School Districts, also in Utah. Other Districts released no numbers, but few states escaped these cuts.
Citing similar concerns Maricopa County Colleges, which serves American’s 5th largest city Phoenix, Arizona Reduced hours of 700 adjunct faculty and 600 part-time workers below 30 per week, impacting 1300 employees. The University of Tucson followed suit, impacting 500-700 workers. James Madison , George Mason, Longwood, Old Dominion, and Rafford Universities have all cut an unknown amount of workers’ hours.
Earlier this year, 48% percent of U.S. small-business owners say the 2010 Affordable Care Act (ACA) will negatively impact their business. Maybe they were right.