Business

Part-time jobs are growing as health reform kicks in

There always have been part-time jobs. Some workers want them. Some employers provide them out of financial and scheduling necessity.

But the recession that began at the end of 2007 led companies to employ more people part time while keeping a tight rein on full-time jobs. And there are signs the Affordable Care Act is swelling part-time ranks even more as employers prepare to comply with mandates related to providing health insurance coverage for employees.

When the economy fell into recession in 2007, an estimated 24.7 million Americans worked part time. That number now is 27.5 million, about one-fifth of the labor force.

A small share of the part-time growth has been fueled by workers’ preferences. They’re juggling school and work or family and work or downscaling their work lives as they near retirement.

But according to U.S. Department of Labor household surveys, most of the recent part-time job growth is not by workers’ choice. In the latest national jobs report, covering April 2013, nearly 8 million workers – about one-third of all part-timers – said they were working part time involuntarily.

The Labor Department classifies such involuntary part-time work as “for economic reasons.” That means that only part-time hours were offered because of “slack work or business conditions,” or job hunters could find only part-time work.

Indications also abound that employers around the country are turning full-time into part-time jobs to avoid employee health care coverage requirements that will kick in next year.

Chardley Revolus, a 23-year-old Kansas City resident who has worked for a major retail chain for four years, three weeks ago was told she no longer could work 30 hours or more per week.

“I went to no more than 24 hours,” she said. “They said it was because of health reform.”

Beginning in 2014, businesses that have more than 50 full-time-equivalent employees must offer their full-time workers access to a qualified health care plan or pay a penalty of $2,000 a person. The health care law defines a full-time employee as anyone working more than 30 hours a week.

New definition

That is a precedent-setting and low definition of full-time work, a member of the National Federation of Independent Business testified before Congress last month.

“This is already causing rescheduling of employees where public and private employers have read the law,” said William Gouldin, a business owner who has provided health insurance to his full-time employees.

“Every employer will be forced to define part-time employment as something below 30 hours per week, and most will use between 20 and 27.5 hours per week,” Gouldin testified.

The effect will be that many part-time workers will lose hours and income they’ve been getting. They may have to try to find an additional part-time job to help make up the shrinking income.

A study released earlier this year by the University of California-Berkeley Center for Labor Research and Education estimated that 2.3 million workers nationally, or nearly 2 percent of the workforce, are at greatest risk for having their hours cut to less than 30 hours a week.

But there are no formal statistics yet to prove that businesses are holding at 49 employees or cutting work hours to stay under the 30-hour rule. A small survey by the Federal Reserve Bank of Minneapolis found 4 percent of companies were moving toward a larger part-time workforce because of health reform.

Some employers have publicly acknowledged they’re cutting workers’ hours because of the Affordable Care Act. Among them: Regal Entertainment Group, which operates Regal Cinemas and United Artists movie screens; a Five Guys franchise owner; an Applebee’s franchisee; the owner of Papa John’s pizza chain; and a Denny’s franchise owner.

Darden, which owns Olive Garden, Red Lobster and LongHorn Steakhouses, announced and then backed off from a plan to reduce full-time workers to part time after a swell of negative national reaction.

The ‘Obamadodge’

Publicized or not, the part-time trend has become common enough in the service industry that workers have given it a name: the “Obamadodge,” said Mike Enriquez, a labor advocate who’s active in the Kansas City area.

“It’s happening across the board in retail, whether they announce it or not,” Enriquez said.

A grassroots organization called the Retail Action Project earlier this year protested outside a New York City store the conversion of full-time to part-time jobs. The group continues to criticize national retailers for “part-timing” workers that had been full time.

Because of the impending Affordable Care Act requirement, Dennis Jacobe, chief economist for Gallup, said it’s “not a surprise that employers appear to be seeking more part-time workers and fewer full-time employees in 2013.”

That cutback in work hours isn’t good news for employee pocketbooks, he said, or for the overall U.S. economy.

Shorter workweek

The plethora of part-time employment is affecting the length of the average workweek. The monthly Labor Department jobs survey for April pegged the length of the average workweek at 34.4 hours. That’s actually higher than the average of 33.8 hours in 2009, but it continues to show that millions of U.S. workers don’t have a 40-hour workweek.

Though the Affordable Care Act sets a 30-hour-a-week full-time definition for employer-based health care coverage, the Labor Department’s household survey allows people to self-report as part time if they usually work less than 35 hours a week. There’s no overriding Labor Department definition of part-time work.

Officially, the department says: “The Fair Labor Standards Act does not define full-time employment or part-time employment. This is a matter generally to be determined by the employer.”

That freedom, in part, has allowed employers to use different part-time definitions. Part-time work can mean 36 hours a week in some companies.

The overall trend toward more part-time jobs concerns Mortimer Zuckerman, editor in chief of U.S. News & World Report. A nation of part-time workers creates an “army of underutilized labor,” he said in a recent editorial.

And he warned: “From academia to retail, government to warehouse work, employers are increasingly offering part-time work or nominally full-time jobs with lower wages and fewer benefits. Obamacare will accelerate this trend. ... America’s challenge is to avoid descending totally into a low-wage, part-time economy with stagnant growth and employers pressed to shorten workers’ hours or ask them to take unpaid leave.”

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