Obama Slashes Four Hours Off Definition of "Full-Time" Employment

Courtesy of Mish.

The BLS Glossary defines full-time workers as “Persons who work 35 hours or more per week”.

For monthly reporting, the BLS defines part-time as “those who worked 1 to 34 hours during the survey reference week”. With that wording, I am not precisely sure where 34.1 or 34.5 hours fit.

Interestingly, the Obamacare mandate says Anyone Who Works 30-Hour Week Is Now ‘Full-Time’

A little-known section in the Obamacare health reform law defines “full-time” work as averaging only 30 hours per week, a definition that will affect some employers who utilize part-time workers to trim the cost of complying with the Obamacare rule that says businesses with 50 or more workers must provide health insurance or pay a fine.

“The term ‘full-time employee’ means, with respect to any month, an employee who is employed on average at least 30 hours of service per week,” section 1513 of the law reads. (Scroll down to section 4, paragraph A.)

If an employer has 50 or more “full-time employees” and does not offer health insurance, it must pay a penalty per employee for each month it does not offer coverage.

Lookback Period Three Months To One Year

The IRS has a publication on Determining Full-Time Status for Purposes of Shared Responsibility for Health Coverage. The key to explaining the recent jump in part-time employment is found in the look-back period.

Under the look-back/stability period safe harbor method, an employer would determine each employee’s full-time status by looking back at a defined period of not less than three but not more than 12 consecutive calendar months, as chosen by the employer (the measurement period), to determine whether during the measurement period the employee averaged at least 30 hours of service per week.

Common sense would dictate employers look back the minimum time (three months), as opposed to a year. 

Thus, any employer in his right mind would reduce the hours someone worked from say 34 to something like 25 or 28, just to make sure the average hours worked was under 30.

If a lot of corporations did that, and a lot people had reduced hours, then corporations would have had to hire more workers to keep the same total number of hours.

Indeed there was a massive surge in part-time employment (+582,000) in October that spawned many conspiracy theories.

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