The Republican-controlled House of Representatives has been making headlines this week by digging in and attempting to pass the legislation that they saw blocked over the last year. Yesterday, the House passed a bill that mandates major legislation costs be estimated through a process of “dynamic scoring,” which should make cost estimates for the bills more accurate.
Today, the House is expected to continue its legislative charge against the Affordable Care Act (you may know it as “Obamacare”) by redefining the term “full-time” to mean employees who work 40 hours per week, instead of the 30 hours per week originally set forth in the law’s employer mandate.
What seems like pure semantics — the 40 hour workweek has long been a hallmark of the American worker — actually has major potential repercussions for employers affected by the mandate. The charge to “restore the 40 hour workweek” for now only affects companies who employ more than 100 people. Beginning next year, the law will extend to those who employ between 50 and 99 employees as well.
The employer mandate forces employers to either cover 70% of the cost of their employees’ healthcare or pay a $2,000 fine.
The argument on behalf of Conservatives backing the bill, besides that of semantics, makes sense. Many employers have already begun cutting their staff’s hours to below 30 in preparation for the bill. The sentiment is supported, at least anecdotally, by many business owners: last year, Burger King executives said that some franchises were trimming their workers’ hours below 30 to make way for the changes, a sentiment that likely holds true across the entire service sector.
For situations like these, it seems to make sense to raise the employer mandate definition of “full time” to 40 hours. Sure, it’s unlikely that these employers will boost employee hours enough for them to qualify for healthcare, but doing so would at least give employers an incentive to give their existing employees closer to 40 hours per week of work.
The measure, however, is contested by critics on both the left and the right. Those critics argue that the definition of “full time” set forth by the employer mandate doesn’t actually redefine the 40 hour workweek. Instead, they argue, there are far more employees working close to 40 hours than close to 30. According to the Labor Department, they’re right: approximately 23 million Americans (16 percent of the workforce) currently work 30 to 39 hours, while 59 million work 40 hours per week.
By increasing the length of the workweek to 40 hours, the argument continues, employers will have an easier time cutting back the hours of full time employees to just under the minimum required by law. Gary Burtless, a labor market economist at the centrist Brookings Institute, agrees: “If employers ask someone working a 9-to-5 job to leave work at 4:45 p.m. on Friday — instead of 5 p.m. — they’d be below the law’s new threshold.”
Worse, according to the Congressional Budget Office, making workers who are at the 40 hours per week threshold buy their insurance on federally subsidized exchanges would increase the number of people receiving benefits through Medicaid by between 500,000 and 1 million people. That alone would increase the federal deficit by $71.3 billion over the next decade.
You can find the full text of the “Save American Workers Act of 2015″ over at the Library of Congress or read Bloomberg’s coverage here.
