Employers that have pruned the hours of part-timers in response to Obamacare have generated plenty of headlines, mostly negative. But it’s not the only strategy they’re testing in hopes of sparing themselves the expense of buying health insurance for everyone.
Around the country, companies are beginning to share employees.
They’re also increasingly turning to temporary staffing agencies.
When and where possible, they’re using independent contractors.
And, in some instances, they’re turning to professional employer organizations.
Often, none of these options are ideal but are viewed as the best way forward, especially for businesses subject to the law because they employ 50 or more people.
Concerns have been running high about how PPACA will impact business. A recent Gallup survey found that 48 percent of small-business owners say the law is going to be bad for business, compared with 9 percent who say it’s going to be good, and 39 percent who expect no impact at all.
The headline-grabbing response from business has, in part, included trimming of the part-time workforce. The law requires large employers offering health insurance to include part-time employees working 30 hours a week or more. The Federal Reserve Bank of Minneapolis found that 11 percent of employers are shifting to more part-time employees or planning to do so in response to the new healthcare requirements.
But HR managers, small-business interest organizations and others say many companies also are doing what they can to preserve jobs.
It isn’t altruism alone; these business owners also are motived by a desire to keep their companies growing, if not thriving.
Kevin Kuhlman, the Washington, D.C.-based manager of legislative affairs for the National Federation of Independent Businesses, said few of his organization’s members like the idea of “shrinking their businesses.”
That’s why, he said, “we’re seeing a lot of creative strategies” when it comes to addressing the employer mandates of the Patient Protection and Affordable Care Act (PPACA).
“Folks are concerned about the sustainability of their business,” Kuhlman said. “Some might try to survive by atrophy, which isn’t a great approach, or try to find ways to be more productive with fewer employees.”
But rather than “resisting growth” or overwork employees, many companies are trying out new ways of getting the job done.
Sharing, for example.
Some businesses, especially those in the food-service world, are increasingly banding together to split an employee’s workweek between themselves and competitors. In other words, a cook might work 15 hours at one restaurant, put in another 15 at another eatery and wrap up with 10 hours at a third.
Labor interests might object that this approach amounts to exploitation, but advocates say it helps keep people fully employed, if not insured by an employer.
Employers also are turning to temporary staffing agencies as a possible solution.
Many temporary staffing firms are going to be considered large employers under Obamacare, meaning they’ll be compelled to provide health benefits or pay the penalties. But employers who turn to staffing agencies can save money because the cost of the benefits will be lower for a large employer.
How well this strategy will work is unclear. “The issue, of course, is what will the temp agency charge?” asked Dwight D. Menke, the owner of an eponymous brokerage in Topeka, Kansas.