Business owners are already having a hard enough time starting their own businesses,maintaining them and then trying to grow them. Now they face another obstacle: the looming definition of a full-time worker, as defined by the Affordable Care Act. For the past 70 years, a 40-hour workweek has been the norm that many Americans have grown accustomed to. If the ACA is fully implemented with the current statutory definition of the full-time worker as 30 hours a week, millions of American employers may have to change the way they run their businesses to comply. The best solution? “If it isn’t broke, don’t fix it.”
As president and CEO of the International Franchise Association, I want to applaud the great bipartisan work of Sens. Joe Donnelly, D-Ind., and Susan Collins, R-Maine, in proposing a pragmatic, well-thought-out and workable solution. The senators recently proposed legislation called the Forty Hours Is Full Time Act. This legislation would provide important relief from the ACA mandates to both franchisees and small-business owners across many industries by providing flexible work hours for their hardworking employees.
As Donnelly and Collins have noted, Congress should accelerate its efforts to pass this proposed legislation that would change the health care law’s 30-hour workweek definition to the more traditionally used 40 hours. The take-home pay of more and more Americans will be reduced because of the 30-hour workweek. Employees who have their hours managed to part time are losing out on additional work hours that they depend on and will struggle to work the hours necessary to support themselves and their families. Further, these employees are ineligible for the employer-sponsored health care that they need. A workweek of 30 hours will negatively affect economic growth both now and in the future.
The franchise industry supports nearly 18 million jobs in the U.S.; however, these jobs could be in jeopardy if the ACA moves forward with the 30 hours definition as a full-time workweek. According to a study by the nonpartisan Hudson Institute, the employer mandate puts 3.2 million jobs at risk in the franchise industry alone and will add more than $6.4 billion in increased costs to franchise businesses, not including the cost of regulatory compliance.
The Forty Hours Is Full Time Act aligns exactly with the needs of franchise and small-business owners across the nation — providing opportunities to grow their business and to have access to the employees necessary for running a successful company, as we have been strongly advocating since the ACA was passed.
On behalf of the franchise industry and the overall small-business community, I want to encourage Congress to promote the economic strength of our industry and small businesses by passing the Forty Hours Is Full Time Act. The passage of this legislation would change the health care law’s definition of the workweek and would prevent franchises and small businesses from being forced to manage the hours of valuable employees. With a 7.6 percent unemployment rate and 23 million people out of work, underemployed and having given up looking for work, we must do everything we can to protect small businesses to secure their paths to success.
Steve Caldeira is president and CEO of the International Franchise Association.
Terri Henderson, 6, center, whose mother is El Salvador, attends a rally with members of Congress at Union Station's Columbus Circle to announce the Restore Opportunity, Strengthen, and Improve the Economy (ROSIE) Act on July 29, 2014. The legislation provides incentives for government contractors to pay a living wage and other benefits that would help low-income workers.