A tough partisan fight is developing over how best to meet the needs of part-time workers in light of the 30-hour workweek threshold for employer-mandated health care.
Ways and Means Chairman Dave Camp of Michigan warns the mandate, which would start at the beginning of next year under the delayed employer provision of the Affordable Care Act, would create a “new class of employees, the Obamacare 29ers,” with shorter shifts to avert mandates. “Washington should be removing obstacles to individuals finding full-time work, not creating them,” Camp said.
The law would require large employers with at least 50 full-time workers to cover employees who average at least 30 hours on the job per week starting in 2015. If such employers do not cover workers, they face penalties of up to $2,000 per worker, after the first 30 employees. If they provide coverage that falls short of standards, there would be other fines for each employee that uses a tax credit subsidy to buy coverage on an exchange.
House Rules Chairman Pete Sessions, R-Texas, said he expected floor action soon on a proposal by Rep. Todd Young, R-Ind., to raise the workweek threshold for workers eligible for mandated coverage to 40 hours per week. The proposal also would shield more employers from the mandate by raising the monthly gauge for a full-time equivalent employee on a payroll from 120 to 174 hours.
“We just have to find the right time to move the bill. His bill is very powerful,” Sessions said.
In the Senate, Republican proponents plan to offer a similar bipartisan proposal by Susan Collins of Maine as the cornerstone of a GOP alternative that could be offered in a potential side-by-side vote with a Democratic proposal to raise the current minimum wage from $7.25 to $10.10 over two years.
The issue of worker hours marks a developing fight in the broader battle in Congress over the health care law, one that was set aside when President Barack Obama last year postponed enforcement of the employer mandate for a year. But Republicans, and some Democrats, have been looking more closely at the issue as the individual coverage mandate has suffered a choppy rollout. Republicans also have sought to tie the health care law to relatively lackluster jobs growth.
The 30-hour-per-week standard for mandated coverage under the health care law has come under fire from business owners, who warned in a House hearing Tuesday that they might be forced to cut hours of some workers to avoid having to pay for insurance coverage. The GOP proposals have been endorsed by advocates for restaurants, retailers and hotels that rely on many part-time workers.
Critics of the law say the mandate could open the door to claims by part-time workers seeking other benefits such as paid sick leave or family leave.
The mandate tussle has focused attention on the nation’s 6.5 million part-time employees, who make up 17 percent of the nation’s labor force of 154.9 million workers, according to the Labor Department’s latest report. The post- financial-meltdown swell of part-time workers peaked at 19.7 percent in 2010, and has declined in the last year.
Despite that reversal, both sides voice concern about surveys that show little change in a core group of 7.8 million “underemployed” workers: part-time workers who want full-time jobs. Such workers receive few benefits and face hurdles in trying to find full-time work in a time of high unemployment.
The coming debate on the employer mandate will provide a glimpse of the emerging battle lines between the parties on the best approach to helping younger, part-time workers climb the ladder.
Republicans hope to seize momentum from Obama’s campaign against income inequality to make the case for more flexibility to allow businesses to streamline operations and grow. Their mantra: less regulation, low taxes and lean budgets to lift the fortunes of all businesses and workers.
Democrats counter by calling for more direct help for workers in tough times: a higher minimum wage, an extension of expanded jobless aid and more job training. They vow to defeat changes to an employer mandate that extends coverage to some part-time workers. “We are not changing Obamacare over this,” said Majority Whip Richard J. Durbin of Illinois.
Thomas Buchmueller, a business economics professor at the University of Michigan and a former senior health economist for the Council of Economic Advisers, said the workweek threshold for the employer mandate was certain to result in shorter hours for some workers, regardless of how it is structured. He said the current threshold was designed to raise revenue — about $140 billion over 10 years, according to the Congressional Budget Office — and to have a modest impact on workers that average slightly more than 30 hours a week. He said the current threshold was unlikely to have an impact on the large groups of workers that average about 40 or about 20 hours a week.
Advocates of the higher 40-hour threshold say it would mirror a 1938 law that mandates overtime pay. They cite a University of California at Berkeley study that found 2.3 million part-time workers would be at most risk for reduced hours because they are working 30 and 35 hours a week, have no employer coverage and qualify for health care subsidies with earnings less than 400 percent of the poverty-level income. They point to decisions by public and private employers to cut hours of workers in preparation for the mandate.
In other cases, retailers such as Target, Home Depot and Trader Joe’s have dropped health care benefits for some part-time workers, and funnelled them to new health care exchanges.
But defenders of the current mandate argue that the creation of a 40-hour threshold would expose more workers to cuts. They cite a new UC Berkeley study showing 6.5 million workers are at most risk of reduced hours because they work more than 40 hours a week, get no employer coverage and qualify for health care subsidies.
Despite such projections, Rep. Steve Scalise of Louisiana, chairman of the Republican Study Committee, said he would encourage colleagues to back the Young bill as part of a drive for full repeal of the health care law. “Anything that helps to expose and undermine the law is a step forward,” he said.
Young said he hoped to woo Democrats such as Rep. Daniel Lipinski of Illinois, who has a similar proposal that would insert new numbers in the law without repealing any sections. The measure has six Democratic co-sponsors.
Lipinski said he likely would support Young’s version on the floor. He predicted the fate of any proposal would depend on whether “businesses that are impacted by this can come in and reach out to Democrats and convince them that this is a good change to make.”
Collins has pursued a measure similar to Lipinski’s bill in the Senate, with 13 co-sponsors, including two Democrats: Joe Donnelly of Indiana and Joe Manchin III of West Virginia.
Collins said she doubted many employers would cut back the hours of full-time workers just to save on health care benefits but that there is a strong argument for consistency in the workweek standard. “That’s what employers are used to. That is what they accept. That is what they expect,” Collins said.
Or, as Manchin puts it, “Forty hours has always been the standard.”