On January 8, 2015, the House of Representatives voted 252-172 to pass H.R. 30 commonly referred to as the Save the American Workers Act of 2015.
[i] Currently, the Patient Protection and Affordable Care Act (“PPACA”) mandates that employers of large businesses must provide health insurance for full-time employees. [ii] The PPACA definition of a full-time employee is an individual that works at least thirty hours per week, or whose service hours equal to at least 130 hours per month for more than 120 days in a year. [iii] Beginning in 2015, businesses with 100 or more full-time employees and average annual wages above $250,000 are required to insure at minimum 70% of their work force. [iv] In 2016, large businesses will have to insure 90% of their employees. [v] Employers that fail to provide coverage to their employees face a penalty of $2,000 per full-time employee. [vi]
The Save the American Workers Act proposes an increase in the number of hours an employee must work to qualify as full-time. [vii] The Act would raise a full-time employee’s hourly requirement from thirty hours per week to forty hours per week. [viii] Proponents believe that raising the extended hourly requirement will benefit the current employees whose hours are being cut, because the Act will no longer motivate their employers to schedule employees for less than thirty-hours in an effort to reduce the number of insured staff. [ix] Additionally, it will benefit employers by decreasing their mandatory insurance costs. The House supporters predict that this shift could potentially decrease the number of part-time employees in the marketplace. [x]
By comparison, legislators that oppose the Save the American Worker Act contend that if this bill passes it will defeat PPACA’s overall purpose to provide insurance for all Americans. [xiii] Estimates in July 2014 found that a switch to the proposed forty-hour workweek would increase the budget deficit $45.7 billion from 2015 through 2024. [xv] During this timeframe the number of individuals who are insured would decrease overall. [xvi]
Additionally, legislators against the bill contend that instead of cutting employee hours at twenty-nine hours per week, employers will now schedule their employees to work thirty-nine or thirty-nine and a half hours – essentially a full-time job, without the benefit of receiving health insurance. [xvii] They argue there would be less full-time employees required to receive coverage. [xviii] Additionally, they state that the new part-time employees would be forced to seek their own coverage, and some may leave the insurance marketplace altogether. [xix]
The bill is currently on its way to the Senate for approval. However, President Obama has vowed that if it reaches his desk, it will be vetoed.
Gloria Crawford is a first-year law student at DePaul University College of Law. Ms. Crawford attended Roosevelt University in Chicago where she obtained her Masters in Integrated Marketing Communications. She completed her undergraduate studies in psychology from Miami University in Oxford, Ohio. She will receive her JD degree in 2017.