Update on the Economic Story of 2013

Yes, more evidence that the PPACA is ending full-time work in the American retail service sector

Circle K Southeast joined a growing list of national companies shifting workers to part-time status this week, in order to avoid paying Obamacare’s mandatory benefits, CBS-WTOC reports.

The alternative is to pay a $2,000 fine per fulltime worker who is not covered, leading Circle K to become the latest in a long line of companies to slice employee hours to avoid increased costs.

Here was my article several weeks ago in Forbes, though I have been predicting this since last year (when my own company started planning for the same change).

  • dc

    ...easily predictable by anyone with half a brain - so my buddy's company basically made themselves a rule to never expand their workforce, and keep it at 49 people forever, lest their "requirement" take a parabolic leap!

  • jdgalt

    The requirement to provide health coverage (or pay a penalty) is based on "full time equivalent workers", not actual full-time workers. So any company with more than about 60 employees is not going to succeed in getting out of it merely by limiting them to 29 hours or less each. I'm a tax professional and know.

  • skhpcola

    So you've read, digested, and analyzed the 20,000+ pages of new regulations that are contained in OzeroCare? Because, I have to tell you, I'm pretty sure that the huge corporations that have announced the hours-worked reductions have dozens of CPAs, lawyers, and other experts on the pertinent aspects of the new diktats...I'd sooner believe that they are pursuing their best interests within the new law than a single tax pro on the intarwebs. Fact is, even the Marxist filth that drew up these nefarious plans don't know the full implications and unintended consequences of the full act, once it is implemented completely. There are so many key ingredients that were left unwritten and subject to the whims of Ozero's cabal of fucktards that _nobody_ can claim perfect knowledge. But huge corporations have a fiduciary duty to react with alacrity to hazards...

  • http://www.facebook.com/stephen.spero Stephen Spero

    jdgalt: I could be wrong, but I believe the full-time equivalent number determines whether company is covered by the law. Whether you have to pay the benefit to each employee is determined whether the employee works more than 30 hours.

  • ColoComment

    Thank you for highlighting that. That's what I had understoon, but most commentary fails to mention that very important detail.

  • ColoComment

    *understood*

  • Fraizer

    There are two different thresholds here:
    1. Does the healthcare dictate apply to the business?
    - Based on business size of >50 Full Time EQUIVALENT workers

    2. Is thwe business required to provide coverage for the individual?
    - Based on individual's hours being >= 30 hours per week (i.e., full time).

  • marque2

    I do find it interesting that you get folks claiming that the penalty applies to FTE employees and yet I too see very large seeming companies limiting employee hours. Hmm, not sure who knows what.

    In some cases it might be that a large corp is actually, unbeknownst to us, is a franchise. In that case the local owner might be doing things to save his butt.

    But then I see larger companies like Regal Cinemas do it as well?

    Not sure who is right, but my bet is with the big guys.

  • marque2

    They should keep to 48, just in case they have an accidental overlap in employees. Eg one comes in a week earlier than expected and another leaves a week later.

  • nehemiah

    Yes, but when those newly made part time employees go out to get that second part time job, Obama will take credit for another job created and the media will applaud and marvel about how he does it..

  • skhpcola

    Sure. I remember seeing an interview with a Darden franchisee that said that the plain language of the law was forcing his company (that franchised outlets from the main corporation) to cut back employees' hours to ~28/week. This entire issue is exactly analogous to legal tax avoidance behavior. Those actions may be the antithesis of the demagoguery of D-ooshbags, but it is a rational, responsible--and legal--response to a stifling regulatory environment.

    So, yeah...I'm going with the major, national corporations that have announced the reduction of full-time employees' hours. I would find it difficult to believe that these firms and CEOs would be malevolent towards their employees on a whim, if not prodded by an over-weening, malevolent government.

  • http://www.facebook.com/matthew.slyfield Matthew Slyfield

    Two factors:

    The large company with many more that 50 FTEs even after cutting most workers back to part time is required to provide health coverage.

    However, they are only required to provide health coverage to true full time employees.

    So a company with 10 full time employees and 80 half-time employees would have to provide health insurance, but they only have to provide it to the 10 full time employees. A large savings over having 50 full time employees and having to provide health insurance to all of them.

  • marque2

    Now that makes more sense. Plus you would naturally cut a few employees.because now you have additional costs.and.have to cut back somewhere to survive.

    Jesse how long does it take to get used to typing on these newfangled.phones.

  • jdgalt

    Thanks, I stand corrected.

  • AnInquirer

    When a person gets another part time job, that move will not affect the unemployment percentage rate that comes out of the household survey. But it could add jobs to the payroll data. The former measure has been edging down for two reasons: (1) Plummeting labor participation rate -- I think it is down an astonishing 7% in the last four years. (2) Surging part time employment, especially in the 18-25 year old category. Eight months ago, I thought that the surging part time employment could be a self-reporting issue -- where many college students might have remembered part time jobs (that are typically forgotten in this survey) in order to help the current administration stats. However, the part time employment surge has persisted, so it looks like there is a fundamental shift in young people's self-report of part time employment.

  • dc

    not on a whim, but when push comes to shove, you can bet your rear they'll be as malevolent as they need to be.

    and you know damn well the executive bonuses and salaries will be the absolute last thing touched.

  • http://devilish-details.blogspot.com/ mesaeconoguy

    FTE is a labor standard for full time workers, I believe.

    Others have given the logic above.