Protecting the Hours and Wages of Restaurant Employees | Commentary

Posted May 19, 2015 at 12:23pm

The Patient Protection and Affordable Care Act — now known to most Americans as Obamacare — is a law littered with unintended consequences. Perhaps the most egregious is the number of part-time employees seeing their hours and wages cut as employers scramble to comply with the law’s employer mandate.

The root of the problem is the mandate’s redefinition of full-time employment from the historical standard of 40 hours per week to the seemingly arbitrary 30 hours per week. While it may appear this was simply a mechanism to expand employer-based insurance coverage to more Americans, it seems more likely this was a crude attempt at generating revenue for an unsustainably expensive law. But no matter the intent, the impact is clear: According to the Hoover Institution, more than 2.6 million part-time employees are at risk for losing hours and wages.

This is especially true in service sector industries with low profit-margins, and the restaurant industry in particular. The employer mandate kicks in for businesses with 50 or more employees, putting many restaurants right around that threshold. Faced with the sort of cost increases that might put them out of business, restaurant owners are left with the difficult choice of limiting the number of employees to fewer than 50, or limiting the hours of employees to fewer than 30.

Limiting the number of total employees is exceedingly difficult, though: Between the wait staff, hostesses, busboys, line cooks and dishwashers, among others, it’s easy to see how quickly 50 employees can be hired. That often leaves only the option of limiting hours, which ultimately means limiting the paychecks of employees. These aren’t 9-to-5 jobs in most instances; they aren’t salaried positions, nor are they considered high wage.

Somewhat ironically, the folks in these jobs also happen to look like the sort of people Obamacare was designed to help. Rather than getting access to health insurance, however, an employee seeing their schedule cut from 39 hours to 29 hours is getting a 25 percent pay cut — an entire week’s pay each month — courtesy of Obamacare. It doesn’t take much to imagine that money might have been useful in purchasing insurance elsewhere.

In order to help protect the hours and paychecks of restaurant industry employees and other part-time workers around the country, I authored the Save American Workers Act. Unlike the monstrous bill that created these circumstances, my bill is short and to the point: It repeals the 30-hour definition of full-time employment, and restores the 40-hour standard. Lest anyone think this was just a partisan jab at Obamacare, it’s worth noting that Illinois Democrat Rep. Daniel Lipinski joined me in introducing it, and a similar bill was introduced in a bipartisan manner in the Senate by Sens. Susan Collins, R-Maine, and Joe Donnelly, D-Ind.

This simple bill, passed by the House the first week of this Congress, would be a huge win for hourly employees. The Congressional Budget Office analysis underscores this point: It found the Save American Workers act would generate $13.2 billion in off-budget revenue from payroll taxes, which translates to an increase in cash wages of roughly $105 billion.

Supporters of Obamacare often admit the bill isn’t perfect, and pay lip service to the idea of making common-sense changes to the law. Protecting the hours and wages of part-time employees in the restaurant industry and other sectors is a great, simple place to start.

Rep. Todd Young is a Republican from Indiana.