How’s That “Avoiding Obamacare” Working Out for Businesses?

For some, apparently, not so well.

When the 2010 health care reform law passed, critics said it would hinder the creation of jobs and companies would turn full-time employees into part-time employees, and only hire part-time workers in the future as much as possible, to avoid needing to fulfill the Obamacare requirement that they help full-time workers with health insurance.

This fear that the health care reform law would hinder job growth has been pretty definitively disproven, no matter what the Republicans running for office tell you. Even the Congressional Budget Office, which Republicans control these days, has said so.

But it’s true that some companies are doing their darndest to keep their full-time workforce as small as possible so they don’t have to get involved in helping to pay for health insurance for their employees. The Curmudgeon has written about such companies in the past (he’s talking about you, Olive Garden, and you, Regal theaters, although there are many others), and the practice continues. It’s especially prevalent in the fast food industry, where the level of skill needed to perform most jobs isn’t very high and owners have typically assumed that they can always find people to do the jobs they offer pretty easily and without paying them very much.

But you know what? It’s not working out for some of them.

An article in the online health care trade publication Kaiser Health News reports that

“A lot of the fast-food franchisees that did this,” she [note: a lawyer who advises small businesses on their responsibilities under the health care reform law] said, “are now coming back and saying, ‘It was a great idea for reducing the number of people that I have to offer benefits, but now I can’t run my restaurants.’ ”

part timeThey tell her it has been a nightmare trying to manage a part-time staff.

“Because you’ve got people who are less loyal, you’ve got people who are less skilled — who don’t understand the business,” she said. There’s also more employee turnover.

Bromley [the lawyer] has seen many of those restaurants reverse course. “Employers think that there’s a shortcut here or there, and then they realize, yeah, that shortcut really hurt me more than it helped me,” she said.

In other words, companies that employ minimum wage and near-minimum wage workers are learning that they get what they pay for and that underpaying for help and skirting the reform law hurts their business.

They need to learn a simple lesson: PAY YOUR EMPLOYEES!

And when they do pay their employees better they’ll find that paying their employees better will help them get paid better, too.

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