Matt Herridge: Small businesses need relief from burdens of health-care law
Since the roll out of the Affordable Care Act, the one constant has been relief — relief from arduous deadlines, rules regarding existing plans and a troubled website. These efforts were designed to make sure the ACA works better for Americans. However, small business owners — those who create two out of every three new private sector jobs — have yet to see any real relief to ensure the ACA works for them, their employees and their local economy.
Rather than the traditional definition of 40 hours per week as full time, the ACA arbitrarily defined full-time workers as anyone who works more than 30 hours a week. This arbitrary definition is already having a significant impact on businesses and economic growth in West Virginia and risks a shift to a part-time economy. The good news is that there is bipartisan support for a return to the traditional definition of full time, which will provide the relief small businesses need to get this economy back to full steam.
My company owns nine restaurants and currently has over 375 employees, approximately 325 of whom are part-time workers. Many of these part-time employees work up to 35 hours per week at times. The ACA’s employer mandate, which was delayed until the fall of 2015 for businesses with 50 to 99 employees, requires any business that has more than 50 full-time equivalent workers to provide all employees with health insurance or pay a penalty.
I already offer my full-time employees health insurance, but I simply cannot afford to pay health-care costs for part-time workers. Because of this, many part-time workers will have to be limited to fewer than 30 hours a week. I worry these unfortunate, but necessary, measures will hurt both my part-time employees and my business. The evidence suggests others share my concern.
A recent study by Public Opinion Strategies shows that 64 percent of decision-makers in franchises with 40 to 500 people believe the Affordable Care Act will have a negative impact on their businesses. Twenty-seven percent of those surveyed report that their company has replaced full-time workers with part-time workers; 31 percent have reduced worker hours and 15 percent have reduced staff. Moreover, when looking at these companies that are moving from small to “large” — those with 40 to 70 employees — 59 percent say they are already making an effort to stay below the 50 full-time worker threshold.
Fortunately, we can mitigate these problems without completely overhauling the ACA. Rather, we need to simply go back to the traditional definition of 40 hours a week for a full-time worker. Part-time employees will have more flexibility with work hours, and employers can respond to growth by increasing hours for existing workers without having to deal with prohibitively higher costs.
As written, the current rule does not support economic growth. Figuring out how to maintain viability in the face of new government regulation is not how we should be asking entrepreneurs to spend their time. Instead, they should be channeling their energies into growing their companies, innovating for their customers and building up their workforce. And the recent second delay in implementing the ACA’s employer mandate — which does not apply to my company — does not provide the long-term certainty required to make the types of investments that will get the U.S. economy back on track.
In Washington, a solution is already taking shape. The House of Representatives just passed a bill with bipartisan support to return to the traditional definition of full time under the ACA. In the Senate, thanks to bipartisan leadership from Sen. Joe Manchin, there is momentum behind a similar measure. Sen. Manchin hears the concerns of small businesses across West Virginia and should be applauded for this important effort. I urge all of our West Virginia legislators to follow suit and support this important fix for small business in our state.
Matt Herridge, of the Charlton Management Group, owns a collection of Burger King and Qdoba franchises throughout West Virginia.