The Obama administration announced drastically challenging economic reforms to get the economy going forward so that America does not hit another recession bomb. But ever since the norms were introduced, folks across USA have been subjected to a lot of trouble with the latest being private employers who have cut working hours of employees to save a mandatory insurance provision order.
And guess what, it is the ordinary folks who feel the most severe of the consequences and that too when the nation is having a financial meltdown. First, the Government agencies were forcibly shut to cut down on salary expenses. Now reports are emerging from several corners that private employers are cleverly cutting work hours of its employees.
Why did we claim it was clever? Well under the new Obamacare policy, firms having more than 50 employees who work more than 30 hours a week should without any hesitation or delay provide health insurance to its entire workforce. Add this requirement to the already rock bottom balance sheets and a good majority of American employers would go bust. The new initiative termed Affordable Care Act seems not so affordable for companies especially those that operate on limited budget and have employee size that meets the requirement of the act.
Insurance needs to be offered for medical and other expenses by companies under this new act for every employee who is a full time worker. The stipulated weekly working hours for an employee if to be considered as a full time worker is 30 hours. Unless and until this stipulation is met, the going will be tough for employers. However, they came up with a solution and that is now a big concern for a good majority of American workers. To counter this move of forced insurance provisions, many private players are converting a good number of their full time staff to part time workers.
A recent survey report by the Society for Human Resource Management throws light on the woes that American employers are facing. It shows that the health benefit cost per employee will rise up 4.8 per cent compared to previous years. With the economic situation not much better than the past, this rising employee cost will certainly be a dampener to any employer and you bet it will affect mid level business owners who are already facing the heat. Reports have already started flowing in stating the rather expected drastic measures from the side of employers. One in five business houses have started to cut working hours and new employments are relatively unheard of in a good number of businesses.
So what exactly is the Obama administration planning to do with the economy. Those found violating the insurance policy as stated above for workers, will be fined a hefty $2000 per employee. So it’s a do or die situation for many employers as well and their moves in this regard to counter Government regulations is quite understandable. With so much risks on the line and with already burgeoning inflation and price rise, will private employers continue to support the economy or not? We will know the answers soon or later.
By Rahul Suresh