Part-Time Nation: Forever 21 Stores Cap Staff Hours

As I’ve said before, one of the least-covered consequences of the Affordable Care Act (ACA) since its passage was the impact it would have on young people. Along with directly imposing onerous new health insurance mandates on young workers who 1.) generally can’t afford them and 2.) generally don’t use much in the way of health services, the ACA also gave companies the perverse incentive to reduce employees from full-time to part-time status as a way to avoid Obamacare’s employer penalties. In fact, a 2012 Congressional Budget Office described as much, estimating that the equivalent of about 800,000 jobs would be eliminated from the economy because of the law.

So what will the Obamacare part-time “new normal” look like? Like this:

“Forever 21,” reads the memo from human resources associate director Carla Macias, “recently audited its staffing levels, staffing needs and payroll in conjunction with reviewing its overall operating budget. As a result, we are reducing a number of full-time non-management positions.” All employees who received the memo will be reduced to a schedule to not exceed 29.5 hours per week. Why is that the magic number? Because under President Obama’s Affordable Care Act, mid- and large-sized employers are required to pay for health insurance for employees who work 30 hours or more. Forever 21 thinks it can get around this simply by reducing its technically-full time staff to part-time positions.

And they’re right.

Yes they are. Of course, Forever 21 is now denying that the move has anything to do with the health care law, but there’s plenty of reason for skepticism there. Why 29.5 hours? Why not 31 hours? Or 30 hours? Heck, why not a round number? And this is not the first time we’ve seen the ACA’s 30-hour work week limitations come into play. As I’ve written before, Obamacare also incentivizes companies to ship jobs overseas to avoid the 30-hour full-time equivalent work and health care requirements. Maybe legislators should have read the bill to find out what was in it before they passed it, not after.

Young people want gainful full-time employment. For many, the Affordable Care Act is standing foursquare in their way.