Earlier this week, Senator Joe Manchin (D-WV) visited a Burger King location in Vienna, West Virginia as part of a week-long tour of businesses in the state. The meeting, attended by members of the business community and local elected officials, primarily concerned the need to reform the definition of full-time employee in the Affordable Care Act’s Employer Mandate.
Under the health law, employees who work an average of 30 or more hours per week are considered full-time employees, a number which bucks the long-time industry standard of 40 hours per week to qualify for full-time status. Businesses with more than 50 full-time employees would either have to offer affordable health coverage or face hefty penalties. The mandate’s additional cost burdens would have a devastating impact on small businesses, particularly those in the franchise community.
Matt Herridge of Charlton Management, the company that owns the Burger King location where the meeting was held, said that providing health coverage to employees not normally considered full-time would cost his business more than $6,000 per employee who received coverage. The possibility of dramatically increased labor expenses is already forcing his business to weigh personnel management policy changes.
“If we start providing that to every single worker here, we would be out of business within a month,” Herrige told the Parkersburg News and Sentinel. “Most businesses like us have cut folks back to under 30 hours. What we will have to consider later this year is whether we will follow suit or not.”
Sen. Manchin has taken leadership on this issue, cosponsoring S. 1188: the Forty Hours is Full Time Act of 2013. The bipartisan legislation would raise the threshold for full-time status in the Affordable Care Act to the industry-standard 40 hours per week. Companion legislation has already been introduced in the House as H.R. 2575: the Save American Workers Act of 2013.
IFA strongly supports efforts to reform the definition of full-time employee, and is working with its industry partners to ensure to legislators are fully aware of the challenges facing businesses struggling to comply with the Affordable Care Act.
For more information, please see this joint IFA and U.S. Chamber of Commerce on the impact that the Employer Mandate’s definition of full time has on businesses.