House Subcommittee Hearing discusses full-time definition under Affordable Care Act
On October 15, the House Small Business Subcommittee on Health and Technology held a hearing to discuss how the Affordable Care act may affect small businesses. According to a release from Littler, the meeting specifically focused on the provision of the act that defines a full-time employee as any individual working 30 hours or more per week - a change that is already being combated by a bill proposed by House and Senate members in June titled The Forty Hours is Full Time Act.
Panelists echoed common concerns that the designation would lead to less hiring overall. Chief Economist with the Small Business & Entrepreneurship Council Raymond J. Keating emphasized that the Affordable Care Act provided "clear incentives" to hire part-time workers in favor of full-time. He also noted the vast majority of jobs created in 2013 have been part-time.
Keating was questioned by Subcommittee Chairman Chris Collins regarding the Employee Retirement Income Security Act, which deems it illegal to reduce employee time just to avoid paying benefits. Keating was unsure whether any workplace had been found liable under ERISA so far, but noted the act creates further uncertainty.
The changes represent a significant challenge for small businesses that are on the edge of the 50 full-time equivalent worker requirement. Workplaces that go over this number of FTE workers will be required to provide health insurance to full-time employees. The number of FTE workers can be calculated by adding the total number of hours for all workers in a year, and dividing by 2080 - the number of hours per year that one full-time employee typically works. This number includes the hours of part- and full-time workers. To remain in compliance, supervisors will need to carefully track the time of employees with hours that come close to the cut-off number of full-time employees. Time and attendance software can help small businesses make a smooth transition into the new year.
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