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Current Events & Hot Topics Current Events & Hot Topics

More Companies cut part-time worker hours to avoid Obamacare requirement

Companies cut part-time worker hours to avoid Obamacare requirement: report
http://www.nydailynews.com/news/politics/companies-cut-worker-hours-avoid-obamacare-report-article-1.1333305

Obamacare may end up hurting many of the part-time workers the President had hoped it would help.

Under the far-reaching health care law, large employers are required to offer health insurance to part-time employees working at least 30 hours a week.

But that’s not how it’s played out.

Instead of granting insurance plans to part-time employees, a growing number of larger firms are actually cutting back on workers’ hours altogether, the Los Angeles Times reported.

In the process, the employers are stripping part-time workers not only of their ability to get company health insurance but of their much needed wages as well.

The city of Long Beach, Calif., for example, is cutting the hours of many of its 1,600 part-time workers to fewer than 27 hours per week, the Times reported, in an effort to prevent them from qualifying for company-offered health insurance.

Obama's signature Affordable Care Act has had unintended consequences.

Long Beach officials have said the benefits they otherwise would have to offer could cost the municipality as much as $2 million, a price that could result in cutbacks to city services.

"We're in the same boat as many employers," Tom Modica, the city's director of government affairs, told the Times. "We need to maintain the programs and service levels we have now."

More than 2 million workers at large restaurant chains, retailers and a variety of other companies that employ more than 50 people across the U.S. are facing similar consequences.

Bill Dombrowski, who heads up the California Retailers Association told the Times that the cuts represent “the only way to survive economically” under the requirements under the Affordable Care Act.

Last week, the largest U.S. movie-theater chain cut the hours of many workers below 30 hours to bypass the law. In a memo to employees, the Regal Entertainment Group, blamed the decision explicitly on the policy often referred to as “Obamacare.”

“To comply with the Affordable Care Act, Regal had to increase our health care budget to cover those newly deemed eligible based on the law's definition of a full-time employee,” the company stated in a memo. “To manage this budget, all other employees will be scheduled in accord with business needs and in a manner that will not negatively impact our health care budget.”

Darden Restaurants Inc., which owns the Olive Garden and Red Lobster chains, made similar cuts last year, too, before the company reversed course due to intense criticism.

aedelman@nydailynews.com
by on May. 2, 2013 at 11:37 PM
Replies (11-20):
DestinyHLewis
by Destiny on May. 3, 2013 at 12:11 AM


Mmmmuuuuaaaahhhh! ;-)

Quoting JoshRachelsMAMA:

Lolol, haha okay you get to laugh at me tonight ;-)

Got to kiss me later though heh heh......


Quoting DestinyHLewis:


Haha! I saw the original 2 posts before this. I knew immediately she didn't realize you were being sarcastic. ;-) 


Quoting talia-mom:

Sarcasm dear



So many on here think these fast food franchise owners make 100's of thousands a year off a single McDonald's





Quoting JoshRachelsMAMA:

No they don't want to pay for the clusterfuck that is Obamacare.





Quoting talia-mom:

These owners should only make 15k a year, otherwise they are greedy.







JoshRachelsMAMA
by JRM on May. 3, 2013 at 12:14 AM
1 mom liked this

sexy

Quoting DestinyHLewis:


Mmmmuuuuaaaahhhh! ;-)

Quoting JoshRachelsMAMA:

Lolol, haha okay you get to laugh at me tonight ;-)

Got to kiss me later though heh heh......


Quoting DestinyHLewis:


Haha! I saw the original 2 posts before this. I knew immediately she didn't realize you were being sarcastic. ;-) 


Quoting talia-mom:

Sarcasm dear



So many on here think these fast food franchise owners make 100's of thousands a year off a single McDonald's





Quoting JoshRachelsMAMA:

No they don't want to pay for the clusterfuck that is Obamacare.





Quoting talia-mom:

These owners should only make 15k a year, otherwise they are greedy.








....I am only responsible for what I say,NOT for what you understand.....
MissTacoBell
by on May. 3, 2013 at 12:34 AM
6 moms liked this
It will be interesting to see how this works out for these companies.

In the short term, this seems like a good business solution. However, there are other elements to consider.

For example: Say you have 100 employees that work 40 hour weeks and you are subject to this law.

You reduce all their hours to 27 to dodge the law. You now have to hire and train 49 more people to support operations.

Suddenly you are spending 50% more in training costs, hiring costs among other fringe benefits that are incurred on a per person basis. You are also subject to more administrative regulations because you increased your minimum employee count. You need more space to support the increase depending on the business.

You also now have a massive drop in morale because you had a content workforce with full paychecks and now you have 100 people who are pissed off, worried about paying their rent. And they're blaming you for being a penny pinching bastard. As such, they (and the 49 people you hired) are probably not going to be NEARLY as efficient as before due to the change leading to either not meeting your business needs or needing to hire MORE staff to compensate.

And then there's your unemployment insurance. You see, these employees can now seek unemployment for being "underemployed". The influx in claims is going to boost the cost of your UI insurance. In fact, a disgruntled workforce will boost the rest of your insurance policies too.

Then there's their PR. It makes them look bad (hence why Darden tried it and took it back when people kicked up a stink). If you can get your TV at both a place who does this to their people and a place that doesn't, who are you going to choose? That's a lost sales cost. Probably the worst one of all.

They are not saving any money in the long run; short run, sure, but long run not really.

What this law should have done is reigned in insurance companies. If they were required to charge a reasonable fee instead of an outrageous one, we wouldn't be having this problem.
JoshRachelsMAMA
by JRM on May. 3, 2013 at 12:38 AM
Good analysis

Quoting MissTacoBell:

It will be interesting to see how this works out for these companies.



In the short term, this seems like a good business solution. However, there are other elements to consider.



For example: Say you have 100 employees that work 40 hour weeks and you are subject to this law.



You reduce all their hours to 27 to dodge the law. You now have to hire and train 49 more people to support operations.



Suddenly you are spending 50% more in training costs, hiring costs among other fringe benefits that are incurred on a per person basis. You are also subject to more administrative regulations because you increased your minimum employee count. You need more space to support the increase depending on the business.



You also now have a massive drop in morale because you had a content workforce with full paychecks and now you have 100 people who are pissed off, worried about paying their rent. And they're blaming you for being a penny pinching bastard. As such, they (and the 49 people you hired) are probably not going to be NEARLY as efficient as before due to the change leading to either not meeting your business needs or needing to hire MORE staff to compensate.



And then there's your unemployment insurance. You see, these employees can now seek unemployment for being "underemployed". The influx in claims is going to boost the cost of your UI insurance. In fact, a disgruntled workforce will boost the rest of your insurance policies too.



Then there's their PR. It makes them look bad (hence why Darden tried it and took it back when people kicked up a stink). If you can get your TV at both a place who does this to their people and a place that doesn't, who are you going to choose? That's a lost sales cost. Probably the worst one of all.



They are not saving any money in the long run; short run, sure, but long run not really.



What this law should have done is reigned in insurance companies. If they were required to charge a reasonable fee instead of an outrageous one, we wouldn't be having this problem.
jessilin0113
by Platinum Member on May. 3, 2013 at 12:41 AM

Let's add all these workers to the welfare and food stamp rolls.  That'll show Obama.  

cjsix
by Bronze Member on May. 3, 2013 at 12:43 AM

 One of the national grocery chains just cut everyone back to 28 hours...

motherslove82
by Silver Member on May. 3, 2013 at 12:48 AM
Saw this coming...

But hey, why not make it cost more to hire people during a recession?
Sisteract
by Whoopie on May. 3, 2013 at 12:51 AM

Which one?

Quoting cjsix:

 One of the national grocery chains just cut everyone back to 28 hours...


cjsix
by Bronze Member on May. 3, 2013 at 12:52 AM

 kroger

Quoting Sisteract:

Which one?

Quoting cjsix:

 One of the national grocery chains just cut everyone back to 28 hours...


 

BuckeyezRule
by Bronze Member on May. 3, 2013 at 1:04 AM

My thought was, they wouldn't hire more, they'd just work full time salaried workers more. The company my hubby works for, part time is 32 hours, so, just shave a few hours. 

Your point makes total sense if working full time salary more wasn't an option and part time was 40 hours at a company. :)

And, I'm not surprised it's happening. Hubby and I (as I'm sure many others) thought it would. 

I wish there was a good solution.


Quoting MissTacoBell:

It will be interesting to see how this works out for these companies.

In the short term, this seems like a good business solution. However, there are other elements to consider.

For example: Say you have 100 employees that work 40 hour weeks and you are subject to this law.

You reduce all their hours to 27 to dodge the law. You now have to hire and train 49 more people to support operations.

Suddenly you are spending 50% more in training costs, hiring costs among other fringe benefits that are incurred on a per person basis. You are also subject to more administrative regulations because you increased your minimum employee count. You need more space to support the increase depending on the business.

You also now have a massive drop in morale because you had a content workforce with full paychecks and now you have 100 people who are pissed off, worried about paying their rent. And they're blaming you for being a penny pinching bastard. As such, they (and the 49 people you hired) are probably not going to be NEARLY as efficient as before due to the change leading to either not meeting your business needs or needing to hire MORE staff to compensate.

And then there's your unemployment insurance. You see, these employees can now seek unemployment for being "underemployed". The influx in claims is going to boost the cost of your UI insurance. In fact, a disgruntled workforce will boost the rest of your insurance policies too.

Then there's their PR. It makes them look bad (hence why Darden tried it and took it back when people kicked up a stink). If you can get your TV at both a place who does this to their people and a place that doesn't, who are you going to choose? That's a lost sales cost. Probably the worst one of all.

They are not saving any money in the long run; short run, sure, but long run not really.

What this law should have done is reigned in insurance companies. If they were required to charge a reasonable fee instead of an outrageous one, we wouldn't be having this problem.



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