Half of Small Businesses Will Cut Employee Hours to Avoid Obamacare Penalties

By Ray Hennessey

July 17, 2013 – Half of small businesses affected by the new national health-care law plan to either cut hours to reduce workers to part-time status or replace existing full-timers to part-time hours to get around Obamacare requirements, according to a new survey.

What’s more, another 24 percent of companies answering the U.S. Chamber of Commerce’s quarterly small-business outlook survey said they will reduce staff to under 50 employees to avoid paying penalties for failing to offer health insurance.

Anxiety about Obamacare is increasing, even as the administration has put off implementation of some key provisions. Forty-nine percent of small-business owners surveyed said Obamacare is a top worry for them, up from 42 percent in January. Seventy-nine percent believe Obamacare will increase the costs of health care at their companies.

Related: Health Care Reform: Procrastinate No More

And the biggest impact appears to be on hiring. In addition to cutting more workers to part-time status, many companies are curtailing hiring altogether. Just 17 percent of owners surveyed said they had added staff within the past two years. Just 20 percent said they plan to add workers over the coming two years.

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