I bet you’ve never really wondered what constitutes a full-time employee? You probably figured, like me, that if you worked 40 hours a week (maybe 35), you were considered full-time. Normally, this wouldn’t be a question with which you’d need to concern yourself. Your working hours and the compensation you receive for your labor is between you and your employer. Sure, there are some basic labor laws to ensure you’re not working in a death-trap and that neither you nor your employer get a patently unfair advantage in the negotiation, but that’s pretty much it. Or it should be.
Now that Obamacare has arrived, the federal government has to decide what a full-time employee is because Obamacare contains a lot of rules, triggers, and fines — ahem, taxes — that depend on the designation. As you can imagine, that definition will go on a bit.
In the latest indication of how complicated putting the Affordable Care Act into action will be, the Department of Health and Human Services and Internal Revenue Service issued 18-pages of regulations just to describe what a “full-time employee” is. Of note, to the Feds a full-time employee works an average of just 30 hours a week, not the normally accepted 40 hours.
Now, here is the why. It’s important because when the federal government gets its mitts on something, it gets to call all the rules. That’s why we responsible government types want it as far from our lives as the Constitution demands.
The IRS rule is key because companies with more than 50 full-time employees must provide health insurance under Obamacare, or be fined. Business groups have been warning that small companies might try to replace full-time workers with part-time help to avoid being forced to offer health insurance in 2014, but the 30-hour full-time definition is likely to undermine those plans.
In other words, businesses will do what makes the most sense and cut their employee’s hours to avoid the onerous requirements of Obamacare. The IRS, anticipating that, intends to change the definition of “full-time” to make it harder for businesses to do so.
Now, if businesses have to pay full-time benefits to what are essentially part-time employees, what do you think will happen?