Job-killing ObamaCare effectively mandates small business hire part-timers
posted at 2/23/2013 10:19 AM EST
ObamaCare is a massive intrusion of government regulation on small business...as usual, the government's supposedly benificent purpose results in devastation for the supposed beneficiaries of genius bureaucrats..
"Democrats who thought they were doing workers a favor by mandating health coverage can't seem to understand that it doesn't help workers to give them health care if they can't get a full-time job that pays the rest of their bills."
"Welcome to the strange new world of small-business hiring under ObamaCare. The law requires firms with 50 or more "full-time equivalent workers" to offer health plans to employees who work more than 30 hours a week. (The law says "equivalent" because two 15 hour a week workers equal one full-time worker.) Employers that pass the 50-employee threshold and don't offer insurance face a $2,000 penalty for each uncovered worker beyond 30 employees. So by hiring the 50th worker, the firm pays a penalty on the previous 20 as well."
"These employment cliffs are especially perverse economic incentives. Thousands of employers will face a $40,000 penalty if they dare expand and hire a 50th worker. The law is effectively a $2,000 tax on each additional hire after that, so to move to 60 workers costs $60,000. "
2011 Hudson Institute study estimates that this insurance mandate will cost the franchise industry $6.4 billion and put 3.2 million jobs "at risk." The insurance mandate is so onerous for small firms that Stephen Caldeira, president of the International Franchise Association, predicts that "Many stores will have to cut worker hours out of necessity. It could be the difference between staying in business or going out of business." The franchise association says the average fast-food restaurant has profits of only about $50,000 to $100,000 and a margin of about 3.5%.
Because other federal employment regulations also kick in when a firm crosses the 50 worker threshold, employers are starting to cap payrolls at 49 full-time workers. These firms have come to be known as "49ers." Businesses that hire young and lower-skilled workers are also starting to put a ceiling on the work week of below 30 hours. These firms are the new "29ers." Part-time workers don't have to be offered insurance under ObamaCare.
The mandate to offer health insurance doesn't take effect until 2014, but the "measurement period" used by the feds to determine a firm's average number of full-time employees started last month. So the cutbacks and employment dodges are underway.
The savings from restricting hours worked can be enormous. If a company with 50 employees hires a new worker for $12 an hour for 29 hours a week, there is no health insurance requirement. But suppose that worker moves to 30 hours a week. This triggers the $2,000 federal penalty. So to get 50 more hours of work a year from that employee, the extra cost to the employer rises to about $52 an hour—the $12 salary and the ObamaCare tax of what works out to be $40 an hour...
The law that was sold as a way to help business and workers is thus yanking a few more rungs from the ladder of economic upward mobility.
Many franchisees of Burger King, McDonalds, Red Lobster, KFC, Dunkin' Donuts and Taco Bell have started to cut back on full-time employment, though many are terrified to talk on the record. Activist groups have organized boycotts against Darden Restaurants, which owns Olive Garden and Red Lobster, for daring to publicly criticize ObamaCare. It's safer to quietly dodge the new costs and avoid becoming a political target. "
[Bring on the idiotic 'class warfare ' crap attacking business owners , and saying they must provide health care insurance for all employees in 3...2..1...]
My guess is ObamaCare will accelerate new technology...soon Dunkin Donuts wont have many employees, it will be automated self service kiosks ...many restaurants will be buffet-style, with automated pay stations...no more waiters.