Franchises cutting worker hours to avoid PPACANews added by Benefits Pro on November 15, 2013

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Joined: September 07, 2011

My Company

By Dan Cook

New evidence has surfaced that some companies are cutting back workers’ hours to avoid offering them health coverage as required under terms of the Patient Protection and Affordable Care Act.

The latest data to support this trend comes from a study released by the U.S. Chamber of Commerce and the International Franchise Association. The survey focused on 400 small businesses with 40 to 500 workers.

The survey found “nearly a third of franchise businesses have cut workers’ hours because of the requirement that companies with 50 or more full-time workers offer health insurance or pay a fine. … Additionally, 12 percent of non-franchise businesses said they have reduced their workers’ hours because of the law.”

This reduction in hours is happening despite the Obama administration’s decision to delay the employer mandate until 2015 to give the IRS time to clarify reporting procedures for businesses covered by the mandate.

The study found that “more than half of businesses with 40 to 70 workers that responded to the survey said they planned to make personnel changes to stay below the mandate’s threshold of 50 workers.”

The chamber has actively opposed many of the provisions of the PPACA and held up its survey results as proof that its misgivings around how companies would respond have been borne out.

“Instead of providing affordable health care coverage to employees, the law will effectively take hours and wages away from Americans who need and want full-time jobs,” Bruce Josten, the chamber’s executive vice president for government affairs, said in a statement. “That’s bad for businesses and their employees.”

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