Over one-third of the 9.1 million full-time jobs among America's diverse business franchises could be cut back or eliminated by Obamacare as small businesses struggle to maintain profitability while coughing up money to pay for Washington-mandated health care coverage, according to the International Franchise Association.
The threat of hitting 3.2 million full-time workers as the Affordable Care Act takes effect next year is prompting the owners of fast food restaurants, service companies and other franchises to urge Congress to make significant changes in Obamacare.
To help their cause, the association on Friday released a new state-by-state breakdown on the potential impact on jobs in the bull's eye of Obamacare, which declares that a 30-hour week is full-time, not the industry accepted 40 hours. That 10-hour difference has thousands of franchise owners scrambling to either fund healthcare for those working 30 hours, or cut hours back to below 30 hours.
"The ACA has made health care an inextricable cost of running a small business in America and continues to evolve with regard to its cost and complexity for franchisees and franchisors as the law becomes fully implemented ahead of 2014," said IFA Senior Vice President of Government Relations & Public Policy Judith Thorman. "Preparing your franchise business to deal with the ACA should be a top priority for franchisees and franchisors."
Secrets has interviewed several franchise owners who have said that they are planning to cut hours of workers below 30 hours to avoid either having to provide health care or pay a fine.
The new statistics show that California franchises would be hit the hardest. The association said the state is home to 925,000 franchise full-time jobs, and that 324,604 are in jeopardy.
The statistics, based on a 2011 Hudson Institute study, also show that the industry could face additional costs of $6.4 billion, most of which would be passed on to consumers. A North Carolina Five Guys burgers franchise owner, for example, recently told Secrets that he is facing added costs of $60,000 a year under Obamacare and that he would have to boost prices of burgers, fries and hot dogs.
To help businesses figure out the new and evolving law, the IFA launched a new online educational website, www.MakingSenseofHealthCare.org, that includes tools and information for employers to determine which aspects of the employer mandate they are responsible for complying with and testimonials from franchise industry leaders regarding how they are adjusting their businesses and workforce to comply with the law.
Among the changes being urged by the industry is a change from 30 hours to 40 hours for what constitutes a full-time worker.