Do You Know About Obamacare’s Part-Time Trap?

IRS LogoMoe Lane highlighted a number of business in several states that are cutting their employees’ hours (when they’re not actually laying off employees), to prepare for the coming asteroid-strike that are the Obamacare taxes. The IRS, which is in charge of enforcing the bazillion-page monstrosity, recently decided 30 hours is the new “full-time” and so tens of thousands of workers will find their hours cut from a normal 32-40 down to 29, so their bosses can afford to keep them on the payroll.

The whole cycle of government action/business reaction/government overreaction was as predictable as an Obama campaign speech but that didn’t stop the administration from shoving Obamacare on us with a haughty “you’ll find out what it’s all about later, peasant”. Now, we’re in the reaction stage of the cycle.

You know what’s coming, right? Overreaction? Well, here’s the latest from the IRS, as reported in the New York Times.

The new rules apply to employers that have at least 50 full-time employees or an equivalent combination of full-time and part-time employees. A full-time employee is a person employed on average at least 30 hours a week. And 100 half-time employees are considered equivalent to 50 full-time employees.

Thus, the government said, an employer will be subject to the new requirement if it has 40 full-time employees working 30 hours a week and 20 half-time employees working 15 hours a week.

So, your local construction company with 100 employees can’t cut them all down to 29 hours to escape the Obamacare snare. The boss will have to limit them to less than 15 hours of work, because even at 29 hours, they count as 50 employees, enough to trigger the coverage requirements. Now, I’ve done a little bit of scheduling in my time, and I can tell you it will be a nightmare to cover 2,900 man-hours with 14-hour a week employees. Most companies will simply fire people until they’re under the 50-employee threshold and deal with the resulting reduction in income.

In other words, Obamacare hasn’t even begun to cripple the economy, but when it starts, the wounds it inflicts will be brutal.