Monday, March 11, 2013

ObamaCare -- This Is What It Has Come Down To -- Cut Jobs or Cut Hours? -- NBC

This is very, very interesting. The talk all day on CNBC has been about whether an increase in the minimum wage would hurt jobs. This is almost hysterical -- what a great way to change the discussion.

First, the minimum wage issue affects a very small percentage of all full-time workers in the US; ObamaCare affects all full-time workers, and will re-define "part-time" worker. Second, the minimum wage proposal is just that: a proposal. ObamaCare is here and now. Third, many states already have higher minimums. This discussion on the minimum wage has simply caused some folks to take their eye off the real job-killer: ObamaCare.

It is truly amazing how the mainstream media can be ... well ... in football it's called a head fake.

[On a completely different note, a bit of trivia on the minimum wage. There are exemptions even in minimum wage laws:
Many home health care aides are exempt from federal minimum wage and overtime laws, due to a little-known provision in the Fair Labor Standards Act passed in 1974, which puts them in the same category as casual babysitters. The Obama administration has been trying to change that over the past two years, but its efforts have been met fiercely with lobbying from the industry. 
I find that absolutely incredible. Minimum wage for McDonald's teenagers but not for home heath care aides. It certainly is obvious who has the lobbyists in Washington. Reported by CNNMoney, March 11, 2013.]

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Having said that, at least one reporter kept her eye on the ball: a CNBC reporter is noting that large firms are deciding how they will pay for ObamaCare. She says it pretty much comes down to cutting jobs or cutting hours which is a pretty old story by now. But for those who are not "newsaholics" this may still be news.

Interestingly, the rules have not yet been set:
"There's going to be a lot of complexity," said Neil Trautwein, Employee Benefits Policy Counsel at the National Retail Federation (NRF).
The Obama administration is expected to finalize the new rules by spring. So far, Trautwein and others have said officials have been responsive to business concerns about the details.
"We've made some progress on the question of variable workers," he said. It's likely the final rules will include a one-year look back period of an employee's weekly hours to determine full-time status, so that the mandate isn't triggered for seasonal workers.
CNBC did not report this in the story: the government will determine the number of full-time workers, not the employer. The way ObamaCare is set up, a company that thinks it has 35 full-time employees and 15 part-time employees, may in fact hit the 50-employee threshold and be subject to the mandate.

This is why:
Part-time employees can count toward the 50 full-time-employee limit.

According to the Congressional Research Service: The hours worked by part-time employees (i.e., those working less than 30 hours per week) are included in the calculation of a large employer, on a monthly basis, by taking their total number of monthly hours worked divided by 120.”
The CRS provides an example: “For example, a firm has 35 full-time employees (30+ hours). In addition, the firm has 20 part-time employees who all work 24 hours per week (96 hours per month). These part-time employees’ hours would be treated as equivalent to 16 full-time employees, based on the following calculation: 20 employees x 96 hours / 120 = 1920 / 120 = 16."
In the example above, this firm would be considered to have more than 50 full-time employees because of the way that part-time employees are counted.
Bottom line: CNBC is asking whether employers will have to cut jobs or cut hours. It looks like they will have to do both, especially those employers right on the cusp of 50 employees. 

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