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Hospitality: A Positive Sign: Affordable Care Act’s Definition of “Full-Time Work Week” May Change


8/12/13

Synopsis:
 
A new bill, introduced this month, could change the Affordable Care Act’s definition of a full-time work week to 40 hours. What does this mean for restaurateurs? Read further to learn more.
 
Issue:
 
Introduced on August 2, 2013 by U.S. Representative Dan Lipinski, D-Illinois, the bill defines, for purposes of the employer mandate in the Affordable Care Act (ACA), full-time workers as those employees working 40 hours or more per week. If enacted, this legislation would mitigate a significant concern that restaurateurs have regarding the law as, compared to other industries, a disproportionate number of restaurant workers work less than 40 hours per week. Essentially, if enacted, the bill would mean that the number of restaurant employees classified as full time would decrease, and therefore, some requirements of the ACA would not apply to as many restaurateurs and/or some of their employees.
 
With the Affordable Care Act requiring businesses with more than 50 employees to provide health insurance for all full-time employees, if passed, the bill could have a profound impact. This “employer mandate” defines a full-time work week as 30 or more hours per week. Restaurant owners have been critical of the 30 hour work week definition given the number of part-time and seasonal employees the industry employs. The industry has argued that by increasing full-time status to 40 hours per week, they would be better able to manage health insurance compliance requirements and premium costs.
 
The bill has similarities to other legislation introduced earlier in the House and the Senate.


What Does CohnReznick Think?
If enacted, this bill would be great news to the restaurant industry. As operators have been looking at ways to cut hours in order to control ACA-related costs, enactment of the bill means the floor just a got a little higher. While CohnReznick believes that many employees will opt out of employer-provided health care, this bill would also lower the number of employees eligible for coverage.


Contact:
 
For more information, please visit CohnReznick’s Hospitality Industry website and contact Gary Levy, Hospitality Industry Practice Leader, at 646-254-7403.


Circular 230 Notice: In compliance with U.S. Treasury Regulations, the information included herein (or in any attachment) is not intended or written to be used, and it cannot be used, by any taxpayer for the purpose of i) avoiding penalties the IRS and others may impose on the taxpayer or ii) promoting, marketing, or recommending to another party any tax related matters.

This has been prepared for information purposes and general guidance only and does not constitute professional advice. You should not act upon the information contained in this publication without obtaining specific professional advice. No representation or warranty (express or implied) is made as to the accuracy or completeness of the information contained in this publication, and CohnReznick LLP, its members, employees and agents accept no liability, and disclaim all responsibility, for the consequences of you or anyone else acting, or refraining to act, in reliance on the information contained in this publication or for any decision based on it.

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