OBAMAmess: Small Business Owners Are Eager for Workweek-Rule Change to Avoid Health-Law Penalty

Steve Kass acknowledges that if he cuts his employees’ weekly 
hours, “a lot of these people will have to get second jobs.”

Some small-business owners are hopeful that a new Congress will change the federal health law’s requirement that businesses provide health insurance to workers who clock as little as 30 hours a week, or pay a penalty.

Republicans taking over control of the Senate would like to extend the law’s definition of a full-time workweek to 40 hours or more. That move, which would require President Barack Obama ’s approval, could benefit people such as Steve Kass, owner of New York-based American Leisure Inc., with 300 employees.

American Leisure’s Steve Kass says his company can’t absorb
 the costs of providing all employees with health coverage under 
current rules. Andrew Lamberson for The Wall Street Journal

Starting next year, companies like his, with at least 100 full-time workers, are required to offer health coverage—or face fines, ranging from $2,000 to $3,000 per employee. Those with at least 50 full-time workers must provide coverage to their full-timers by 2016, or risk facing the penalties.

About 40% of American Leisure’s employees work between 30 and 40 hours a week, while just over half work more than 40 hours, he says.

With the law’s current definition of a full-time workweek at 30 hours, he is likely to reduce the weekly hours for many of his employees. “We just can’t absorb the costs” of providing all of them with health coverage that complies with the current rules, Mr. Kass says.

He acknowledges that if he cuts his employees’ weekly hours, “a lot of these people will have to get second jobs.”

Most Americans work 40 or more hours weekly. Of the roughly 144 million people with jobs in the U.S. in October, about 46.6 million, or 32%, worked between one and 39 hours a week, while 97.2 million worked 40 hours or more, according to the U.S. Bureau of Labor Statistics. Indeed, that agency defines part-time as less than 35 hours weekly.

The GOP-controlled House of Representatives, in an April vote, backed raising what qualifies as a full-time workweek under the health law to 40 hours a week, from 30, though Mr. Obama at the time threatened to veto the change. In the wake of last week’s election, House Speaker John Boehner said that the 40-hour definition remained one of his top agenda items for the new Congress.

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