Statements on Introduced Bills and Joint Resolutionsby Senator Susan M. Collins
Posted on 2015-01-06
COLLINS (for herself, Mr. Donnelly, Ms. Murkowski, and Mr.
S. 30. A bill to amend the Internal Revenue Code of 1986 to modify
the definition of full-time employee for purposes of the employer
mandate in the Patient Protection and Affordable Care Act; to the
Committee on Finance.
Ms. COLLINS. Mr. President, today, Senator Donnelly and I are reintroducing the Forty Hours is Full-time Act to correct a serious flaw in the Affordable Care Act, also known as Obamacare, that is already causing workers to have their hours reduced and their pay cut. We are pleased to be joined in this bipartisan effort by Senators Murkowski and Manchin. Our legislation would raise the threshold for ``full-time'' work in Obamacare to the standard 40 hours a week. This is consistent with the threshold for overtime eligibility under the Fair Labor Standards Act, and the common-sense understanding of ``full- time'' work.
Under Obamacare, an employee working just 30 hours a week is defined as ``full-time,'' a definition that is completely out-of-step with standard employment practices in the U.S. today. According to a survey published by the Bureau of Labor Statistics, the average American actually works 8.7 hours per day, which equates to roughly 44 hours a week. The Obamacare definition is nearly one-third lower than actual practice.
Similarly, the Obamacare definition of ``full-time'' employee is ten hours a week fewer than the 40 hours per week used by the GAO in its study of the budget and staffing required by the IRS to implement Obamacare. In that report, the GAO described a ``full-time equivalent'' as: ``a measure of staff hours equal to those of an employee who works 2,080 hours per year, or 40 hours per week. . . .'' Even the Office of Management and Budget recognizes that 30-hours is not ``full-time.'' A circular it issued to Federal agencies actually directs them to calculate staffing levels using more than 40 hours a week as a ``full- time equivalent.'' The effect of using the 30-hour a week threshold is to artificially drive-up the number of ``full-time'' workers for purposes of calculating the penalties to which employers are exposed under Obamacare. These penalties begin at $40,000 for businesses with 50 employees, plus $2,000 for each additional ``full-time equivalent'' employee. While these draconian penalities were scheduled to begin in January of last year, we have yet to feel their full effect because the Obama administration delayed their implementation through 2014, perhaps knowing the negative impact that will result. But that artificial grace-period expired January 1 for employers with 100 or more workers and will end for employers with between 50 and 99 employees in January of next year.
Needless to say, these penalties will force many employers to restrict or reduce the hours their employees are allowed to work, so they are no longer considered ``full-time'' for the purposes of the law. In addition, these penalties will discourage employers from growing or adding jobs, particularly those close to the 50-job trigger.
These are not hypothetical concerns. According to the Investors Business Daily, more than 450 employers had cut work hours or staffing levels in response to Obamacare as of September of last year. Employees of for-profit businesses are not the only ones threatened by Obamacare's illogical definition of full-time work. Public sector employees and those who work for non-profits are also affected.
I am concerned that educators, school employees, and students will be particularly hard hit. As the ASAA, the School Superintendents Association, explained in a letter in support of our bill, Obamacare's 30-hour threshold puts an ``undue burden on school systems across the Nation, many of [which] will struggle to staff their schools to meet their educational mission'' while complying with this requirement.
For example, the school superintendent of Bangor, ME, has told me that Obamacare will require that school district to reduce substitute teacher hours to make sure they don't exceed 29 hours a week. This will harm not only the substitute teachers who want and need more work, but it will also harm students by causing unnecessary disruption in the classroom.
Likewise, in Indiana, a county school district had to reduce the hours of part-time school bus drivers to make sure they do not work more than the 30-hour threshold. As a result, the school district has been forced to cut field trips and transportation to athletic events, and employees who used to work more than 30 hours total in two jobs have been forced to give up one of their jobs, hurting their financial security.
The 30-hour rule will also affect our Nation's institutions of higher education. According to the College and University Professional Association for Human Resources, Obamacare's full-time work definition has already caused 122 schools to announce new policies capping hours for students and faculty.
It is troubling that the 30-hour threshold will also harm delivery of home care services. The requirement will likely result in reduced access to needed services for some of our Nation's most vulnerable citizens: home-bound seniors, individuals with disabilities, and recently discharged hospital and nursing home patients. Information provided to my office by the Home Care & Hospice Alliance of Maine shows that many of its member organizations will be forced to reduce work hours for employees or even to cease operations due to Obamacare's definition of ``full-time'' work. If that happens, hundreds of home care workers could lose their jobs, and a thousand seniors could lose access to home care services--in Maine alone.
Data from Maine's Medicaid program show that home care services are extremely cost-effective compared to alternatives. Thus, by making it harder for home care service providers to give their workers the hours they need, [[Page S18]] Obamacare's definition of ``full-time'' work will end up reducing the home care services available to seniors, depriving them of care or forcing them into costlier care, driving up Federal costs.
Before I close, I would like to read a few lines from a letter I recently received from Randy Wadleigh, the owner of a well-known and much-loved restaurant institution in Maine called ``Governor's.'' Randy's letter sums up what Maine employers have always told me--their employees are the heart and souls of their businesses, and are the face of their companies to the public. As Randy puts it, businesses recognize the importance of their workers ``because without GREAT employees, businesses really don't have anything. [The 30-hour threshold] is hurting many of our employees. They don't understand it, they can't afford it and they just want to work more hours.'' The bipartisan bill we are introducing today will protect these workers by changing the definition of ``full-time'' work in the ACA to 40 hours a week, and making a corresponding change in the definition of ``full-time equivalent'' employee to 174 hours per month. This is a sensible definition in keeping with actual practice.
Among the many organizations that have endorsed our bill are: the College & University Professional Association for Human Resources, the National Association for Home Care & Hospice, the American Hotel & Lodging Association, the American Staffing Association, the Asian American Hotel Owners Association, the Associated Builders and Contractors, the Food Marketing Institute, the International Franchise Association, the National Association of Convenience Stores, the National Association of Health Underwriters, the American Rental Association, the National Association of Manufacturers, the National Association of Theatre Owners, the National Grocers Association, the National Federation of Independent Business, the National Restaurant Association, the National Retail Federation, the Retail Industry Leaders Association, ASAA, the School Superintendents Association, the Society for Human Resource Management, and the U.S. Chamber of Commerce.
Regardless of the varying views of Senators on the Affordable Care Act, surely we ought to be able to agree to fix this problem in the law that is hurting workers' paychecks and creating chaos for employers. I urge my colleagues to support this bipartisan legislation.
Mr. President, I ask unanimous consent that the letters of support be printed in the Record.
There being no objection, the material was ordered to be printed in the Record, as follows: December 19, 2014.
U.S. Senate, Washington, DC.
Dear Senator Collins: On behalf of AASA: The School Superintendents Association, the Association of Educational Service Agencies, the National Rural Education Association and the National Rural Education Advocacy Coalition, I write to express our support for the Forty Hours is Full Time Act. Collectively, we represent public school superintendents, educational service agency administrators and school system leaders across the country, as well as our nation's rural schools and communities. We have followed closely the Affordable Care Act and stand ready to implement the law, and see your proposed legislation as one way to alleviate an unnecessarily burdensome regulation.
The Forty House is Full Time Act would change the definition of ``full time'' in the Affordable Care Act (ACA) to 40 hours per week and the number of hours counted toward a ``full time equivalent'' employee to 174 hours per month. The current ACA arbitrarily sets the bar for a full work week to 30 hours. This is inconsistent with how most Americans think: full-time is a 40 hour work week. The current definition causes confusion among employers who struggle to understand and comply with the new requirements, especially ones that are in conflict with long-standing practices built on the long-standing 40-hour work week premise.
We welcome the opportunity to ensure our employees have a positive work environment and we remain committed to providing a robust set of work benefits. We are concerned that the ACA, as currently written, puts additional, undue burden on school systems across the nation, many of whom will struggle to staff their schools to meet their educational mission while meeting the strict 30-hour regulation.
We applaud your continued leadership on this issue and look forward to seeing the Forty Hours is Full Time Act move forward.
Sincerely, Noelle M. Ellerson, AASA, The School Superintendents Association, Associate Executive Director, Policy & Advocacy, AESA, NREA and NREAC Legislative Liaison.
____ Governor's Restaurant & Bakery, Governor's Management Company, Inc., Old Town, ME, December 22, 2014.
Re Definition of full time hours for the ACA Hon. Susan Collins, 413 Dirksen Office Building, Washington, DC.
Dear Susan: Governor's Restaurants have been a staple in Maine since 1959. We have 6 locations and employ over 300 full and part time fine Maine folks while serving the great people of Maine. In general, we've had longevity because we pay attention to business and play by the rules dictated to us by local, state and federal agencies. In a nutshell, we take pride in doing the right things.
As our company's CEO, I recently conducted health insurance enrollment meetings at all of our locations for those 100+ eligible full time employees (as currently defined at 30 hours per week}. We are strongly in favor of changing the current definition of a full time employee from 30 hours to 40 hours . . . but not necessarily for the reason(s} you may think.
On behalf of our employees, we've just got to increase the threshold to 40 hours. Our offered health plan is defined as affordable and meets minimum standards as defined by the law, but when you express to the employee that they must contribute +/-$30 per week it becomes a heartfelt choice to pay for food, child care, rent OR pay for health care. On more than one occasion, I had employees (all of whom worked less than 32 hours per week} break down in tears because they just can't afford coverage. At the same time, those that worked over 38 hours, were more likely to participate and in fact could afford coverage.
When ACA was first introduced, I could never understand why the law defined 30 hours per week. Our company has had to make dramatic cuts in hours to some staffers to reduce exposure. But once again this hurts the employee.
So you see the obvious selfish thing to do as a business person is to cry foul about the health care law and how it affects our bottom line. But our company takes a bit of a different approach. We recognize the importance of our people because without GREAT employees, business owners really don't have anything. This law is hurting many of our employees. They don't understand it, they can't afford it and they just want to work more hours. 30 hours is too restrictive to them. 40 would be better for them and ultimately for business and such change would benefit both the employee and the employer.
Thanks for your great work in Washington.
Sincerely, Randy Wadleigh, Owner and CEO, Governor's Management Company.
______ By Mrs. FEINSTEIN (for herself, Mr. Udall, Mr. Blumenthal, Ms. Klobuchar, Mr. Grassley, and Ms. Heitkamp): S. 32. A bill to provide the Department of Justice with additional tools to target extraterritorial drug trafficking activity, and for other purposes; to the Committee on Finance.