Monday, November 5, 2012

Health-Care Law Spurs a Shift to Part-Time Workers

Some low-wage employers are moving toward hiring part-time workers instead of full-time ones to mitigate the health-care overhaul's requirement that large companies provide health insurance for full-time workers or pay a fee.

Several restaurants, hotels and retailers have started or are preparing to limit schedules of hourly workers to below 30 hours a week. That is the threshold at which large employers in 2014 would have to offer workers a minimum level of insurance or pay a penalty starting at $2,000 for each worker.
The Wall Street Journal's story Health-Care Law Spurs a Shift to Part-Time Workers discusses a change that never even occurred to me in considering the Affordable Care Act. When does health insurance hurt workers? When employers are squeezed so that they can't take any other measures.

Reading the article, I thought these employers were jerks. And then I got to the examples.
Pillar Hotels & Resorts this summer began to focus more on hiring part-time workers among its 5,500 employees, after the Supreme Court upheld the health-care overhaul, said Chief Executive Chris Russell. The company has 210 franchise hotels, under the Sheraton, Fairfield Inns, Hampton Inns and Holiday Inns brands.

"The tendency is to say, 'Let me fill this position with a 40-hour-a-week employee.' "Mr. Russell said. "I think we have to think differently."

Pillar offers health insurance to employees who work 32 hours a week or more, but only half take it, and Mr. Russell wants to limit his exposure to rising health-care costs. He said he planned to pursue new segments of the population, such as senior citizens, to find workers willing to accept part-time employment.
And I had to think differently. This employer is offering insurance in good faith. But the government's Affordable Care Act would penalize him for something that half of his employees are essentially turning down. They evidently don't need it.

And the employers are going to have to find ways around it to survive.

A bad situation forced upon all of them by the lack of thought that went into the Affordable Care Act.


  1. Not surprised. I know a couple people who were reduced this summer to below-30, including a man who was already working two jobs. Now he has three part-time jobs.

  2. Many US people going to be fired because of health care laws. It has great effect on small and medium scale businesses.