In states that setup their own exchanges, businesses with 50 or more full-time employees will be penalized financially for not complying with the insurance requirements. Obamacare defines “full-time” as anyone who works 30 or more hours per week. So, to avoid being penalized, employers will undoubtedly cut enough workers’ hours under 30 so they will not be considered full-time and therefore will be under the 50 full-time worker threshold so their business will not be subjected to the penalty.
However, it is not that simple. You see, part-time employees can count toward the 50 full-time employees limit. According to the Congressional Research Service:
“The number of full-time employees excludes those full-time seasonal employees who work for less than 120 days during the year. The hours worked by part-time employees (i.e., those working less than 30 hours per week) are included in the calculation of a large employer, on a monthly basis, by taking their total number of monthly hours worked divided by 120.”
The CRS even provides a nice example:
“For example, a firm has 35 full-time employees (30+ hours). In addition, the firm has 20 part-time employees who all work 24 hours per week (96 hours per month). These part-time employees’ hours would be treated as equivalent to 16 full-time employees, based on the following calculation:
20 employees x 96 hours / 120 = 1920 / 120 = 16”
Got that? In the example above, this firm would be considered to have more than 50 full-time employees because of the way that part-time employees are counted.
Businesses should be wary of this. Part-time workers do count when determining if an employer is considered “large.”
Funny. It’s almost as if Obamacare is designed to force people out of work. But that could never be the case.
Cross-posted a Rampart Media