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“Forty Hours Is Full Time Act” Would Be Step Backwards

A small bipartisan group of senators has asked Senate Budget Committee leaders to include their Forty Hours Is Full Time Act in a final fiscal year 2014 budget resolution.  But raising the threshold for full-time work under health reform from 30 to 40 hours a week, as this measure would do, would exacerbate the very problem that the senators hope to solve — that health reform may lead to more part-time work.

Health reform requires employers with at least 50 full-time-equivalent workers to offer health coverage to full-time employees or pay a penalty.  Critics claim the requirement is prompting employers to shift some employees to part-time work.  As the Wall Street Journal reports, however, recent data provide scant evidence of such a shift.

The fact is that it’s too early to know how health reform will ultimately affect the amount of part-time work.  But there’s every reason to expect the impact to be small as a share of total employment, as we recently explained.

One thing we do know is that raising the cutoff for the employer mandate from 30 to 40 hours a week would make a shift towards part-time employment much more likely — not less so.  Ken Jacobs, chair of the University of California’s Center for Labor Research, says, “While we can expect some employers to cut workers’ hours as a result of the current law, the number would explode if the [proposal to increase the threshold] was adopted.”

Only about 8 percent of employees work 30 to 34 hours a week (at or modestly above health reform’s 30-hour threshold), but 43 percent of employees work 40 hours a week and would be vulnerable if the threshold rose to 40 hours (see chart).  Another few percent of employees work 41 to 44 hours a week.  Thus, more than five times as many workers would be at risk of having their hours reduced if the standard for full-time work went from 30 to 40 hours.