New 'Full-Time' Definition Threatens Small Business

Date: November 15, 2013

The new healthcare law requires employers with 50 or more full-time-equivalent employees to provide minimum essential healthcare coverage for full-time employees and employees’ dependents. The catch: The law defines full-time employment as 30 hours per week, instead of the long-standing norm of 35 to 40 hours.

Because of the 30-hour threshold, some small business owners are considering reducing employees’ hours to minimize their financial burden under Obamacare. 

NFIB member William J. Gouldin, president of Strange’s Florists, Greenhouses and Garden Centers in Richmond, Va., testified before the U.S. House Small Business Committee in April about the problems the new 30-hour threshold creates.

“There are millions of people who currently work between 30 and 36 hours per week,” Gouldin said in his testimony. “These people will be required to lose needed hours of work and income. Millions will be forced to work two part-time jobs. … The new full-time employee definition will cause a hole in employment between 27.5 and 37.5 hours per week, and very few people will be allowed to work between those hours.”

Kevin Kuhlman, NFIB’s manager of legislative affairs, agreed that the new threshold causes confusion. “Employers will have a difficult time carefully tracking hours of full-time and part-time employees to comply,” he said.

Fortunately, Kuhlman added, the employer mandate, originally scheduled to begin in 2014, has been delayed by one year. “It is our hope that the additional time will allow Congress to fix this fundamental problem with the law.”

In the meantime, NFIB supports H.R. 2575, the Save American Workers Act of 2013, which would repeal the Affordable Care Act’s 30-hour definition and replace it with the traditional 40-hour definition. If this change is made, small businesses may not need to drastically change employee hours or spend time and money tracking employee head count and hours. Visit www.NFIB.com/40Hours to encourage your representative to support the Save American Workers Act. 

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