A one-year delay in the employer mandate is not changing the trend of businesses limiting the number of employees in their workforce and shifting more employees to part-time in response to President Obama’s health care law, according to Reuters.
Obamacare penalizes businesses with over 50 employees that do not offer government-approved insurance to employees working at least 30 hours a week.
Reuters spoke to several staffing companies that confirmed the law was motivating executives to shift workforces to part time, and reports:
“Us and other people are hiring part-time because we don’t know what the costs are going to be to hire full-time,” said Steven Raz, founder of Cornerstone Search Group, a staffing firm in Parsippany, New Jersey. “We are being cautious.”
Raz said his company started seeing a rise in part-time positions in late 2012 and the trend gathered steam early this year. He estimates his firm has seen an increase of between 10 percent and 15 percent compared with last year.
Other staffing firms have also noted a shift.
“They have put some of the full-time positions on hold and are hiring part-time employees so they won’t have to pay out the benefits,” said Client Staffing Solutions’ Darin Hovendick. “There is so much uncertainty. It’s really tough to design a budget when you don’t know the final cost involved.”
On Jul. 2, the Obama administration announced it was delaying the employer mandate for a year, until 2015, to provide more time to businesses, but according to Reuters:
The delay in the Obamacare employer mandate “confused people even further,” said Bill Peppler, managing partner at Kavaliro, a technology staffing firm in Orlando, Florida. “When we talk to customers, I still don’t think anyone has a handle on this.”