U.S. Sen. Joe Donnelly (D-Ind.) is taking what he’s calling “a two-pronged approach” in addressing the problem of less-than-full-time employees losing their jobs as employers face the full implementation of the Affordable Care Act.
Donnelly and U.S. Sen. Susan Collins, R-Maine, are co-authors of legislation aimed at giving employers a better definition of and clarity on “full-time employee” under the law.
In a statement, Collins said the new health care law creates a perverse incentive for businesses to cut their employees’ hours so they are no longer considered full time.
Democratic backers of the ACA, however, have largely pushed for keeping the 30-hour rule, saying it will result in more employers offering health insurance to employees. The Wall Street Journal reported Wednesday that Donnelly is the first Democrat to sign onto the proposed 40-hour change.
“If its definition of a full-time worker as someone who works only 30 hours a week is allowed to go into effect, millions of American workers could find their hours, and their earnings, reduced. This simply doesn’t make sense,” he said.
“Most Hoosiers I know think 40 hours is full time. We need to change the definition of a ‘full-time employee’ in the Affordable Care Act to bring it in line with what most Americans have traditionally recognized as full time,” Donnelly said. “We also need to provide clarity to employers so they have the information they need to run their businesses and plan for the future.
“Many employers have to make decisions because of this definition, and some have chosen to cut current part-time employees’ hours. This will leave too many Indiana families struggling to make ends meet, Donnelly said.
Beginning in 2014, employers with more than 50 full-time employees will be required to provide employees with a basic level of health insurance or potentially face a penalty.
Under the ACA, a full-time employee is defined as an individual who works an average of at least 30 hours per week.
Sens. Collins and Donnelly introduced the Forty Hours is Full Time Act of 2013, which would change the definition of “full time” in the ACA to 40 hours per week and the number of hours counted toward a “full-time equivalent” employee to 174 hours per month.
As they work together on the 40 Hours legislation, Collins and Donnelly are also asking President Barack Obama to provide transition relief for employers.
They co-authored a letter to the president strongly urging his administration to work with the employer community to provide transition flexibility beyond Jan. 1, 2014, free from the threat of penalty.