HR Compliance

Is 30 the New 40?

By

Rod Lott

| Oct 24, 2013

In the scope of basic math, the difference between 30 and 40 isn’t much. The continuing battle over the Affordable Care Act (ACA), however, is anything but basic.

Currently at stake in the U.S. House of Representatives is the definition of a full-time employee. Whereas most federal labor laws equate a 40-hour workweek to full-time employment, the ACA definition lowers that to 30.

Because the ACA requires businesses with at least 50 full-time employees to offer health insurance, opponents see the 30-hour minimum as a financial burden. One of them, Rep. Todd Young (R-Ind.), has sponsored House Bill 2575 to repeal the definition. Dubbed the Save American Workers Act, his bill boasts more than 150 co-sponsors.

At an Oct. 9 subcommittee hearing to determine ACA’s effect on small businesses nationwide, Rep. Chris Collins (R-N.Y.) said that the 30-hour definition is “fueling the nation’s underemployment trend and harming the economy.”

“This law is forcing more companies to limit hours so they can remain open,” Collins said in a press release. “Based on reports, numerous independent surveys of small businesses and the testimony of today’s witnesses, more employees, both full- and part-time, will see their hours reduced because of this health law.”

According to the U.S. Chamber of Commerce this past summer, nearly three-quarters of small firms reported intent to do something to avoid ACA’s mandate, including scaling back on hiring plans and converting full-timers to part-time status. Already, brand-name businesses including Walmart and Subway have done the latter, although the ACA mandate will not go into effect until 2015.

In the first eight months this year, approximately two-thirds of gains in employment are because of part-time positions, according to the Small Business & Entrepreneurship Council.

“The evidence is clear,” Collins said. “The fact that part-time work has made up the majority of the job growth so far this year is proof.”

Center for Economic and Policy Research co-director Dean Baker disagrees.

“I simply don’t think some of these claims on the face are very plausible,” Baker said at the hearing, citing that more than two-thirds of part-time workers do so by choice. “That’s not necessarily a bad thing that we see a small increase in the number of part-time jobs available to people who might be raising children [or] have other reasons not to want full-time employment.”

About the Author

Rod Lott

As Paycom’s Editorial Manager, Rod Lott brings more than two decades of experience in marketing, advertising, branding and journalism. A published author and a graduate of the University of Oklahoma, he has worked with such brands as Blue Cross Blue Shield, Sonic Drive-In and OU.

See more posts by Rod Lott