H.R. 2575: Sabotage American Workers Act of 2014

Apr 3, 2014
Press Release

Today, the House will complete consideration of H.R. 2575, Sabotage American Workers Act. 

The Administration has issued a veto threat on the bill.  The Administration’s SAP on the bill states, “The Administration strongly opposes House passage of H.R. 2575, Save American Workers Act, because it would significantly increase the deficit and reduce the number of Americans with employer-based health insurance coverage.”  For the full SAP, click here.

A fact sheet on the bill is below.  For a printable version of the fact sheet, click here.

Key Points:

Today, the House will complete consideration of H.R. 2575, a GOP bill to redefine the definition of full-time work week under the Affordable Care Act from 30 hours a week to 40 hours a week.  Under the Affordable Care Act, larger employers that do not offer affordable, adequate health insurance coverage to full-time employees are subject to a penalty that helps defray the public cost of coverage for their uncovered employees.  These provisions are effective for employers with 100 or more employees (2% of employers) in 2015 and with 50-99 employees (2% of employers) in 2016.

According to the nonpartisan Congressional Budget Office, this GOP bill would:

  • Increase the federal deficit by $74 billion, while violating Republicans’ own CUTGO rule;

  • Force one million people to lose their employer-provided coverage; and

  • Increase the number of uninsured by up to 500,000.

Republicans claim that the reason this GOP bill is desperately needed is that, since its enactment in 2010, the Affordable Care Act has been a “job-killer” and has led to a shift to part-time work.  The trouble with Republicans’ argument is that the “problem” they cite doesn’t exist.  Here are the facts:

  • Indeed, over the past 12 months, the number of full-time workers has grown by more than 2 million, while the number of part-time workers has fallen by 230,000. (BLS)

  • The number of part-time workers today is actually lower (by about 300,000) than it was when the Affordable Care Act was enacted in March 2010.  (BLS)

  • Every recent jobs report shows that there has been no increase in part-time work.  The Congressional Budget Office definitively stated in February, “In CBO’s judgment, there is no compelling evidence that part-time employment has increased as a result of the ACA.” (CBO)

  • Since the ACA was enacted, 8.6 million private sector jobs have been created.  (BLS)

Independent fact-checkers have confirmed that claims by key Republicans that the Affordable Care Act has resulted in shifting workers to part-time work are false.  For example:

  • In the fall of 2013, PolitiFact rated the claim of then-GOP candidate for Virginia Governor Ken Cuccinelli that “since the president signed [ACA] into law, … most of our new jobs have been part-time jobs limited to less than 30 hours a week” as false.  PolitiFact pointed out, “Contrary to Cuccinelli’s claim, full-time jobs have grown 10 times faster than part-time employment since Obamacare was signed into law.”

  • Similarly in August 2013, FactCheck.org rated the claim of the Republican National Committee that “8.2 million Americans can’t find full-time work partly due to Obamacare” as false.  FactCheck.org pointed out, “There were more in this ‘part-time for economic reasons’ category in March 2010, when the Affordable Care Act was signed (9.1 million).”

Republicans also claim that another reason the bill is needed is that the ACA has already significantly burdened employers – by increasing employers’ health care costs.  Actually, the facts are that, since the enactment of the Affordable Care Act, health care costs for businesses are growing at record low rates:

  • Towers Watson reports that U.S. employers experienced the smallest increase in health care costs in 15 years in 2013, based on their annual survey – increasing by only 4.1 percent.  The Towers Watson survey measures employer health care costs per employee.

  • Similarly, the Kaiser/HRET annual survey of employer-sponsored health benefits shows that the average premium for employer-sponsored family coverage increased by only 3.8 percent in 2013 – the lowest increase in all but one of the last 14 years.  The Kaiser/HRET survey also shows that the average premium for employer-sponsored family coverage grew by an average annual rate of 8.5 percent between 2000 and 2009 – more than twice as fast as the growth rate of 3.8 percent in 2013.   

As was noted above, there is no evidence that the ACA has caused a shift to part-time work to date.   Looking forward, the employer responsibility provision goes into effect in 2015 for larger employers.  While Republicans claim that this GOP bill will help employees work more hours, CBO concludes that this GOP bill would actually cause many more workers to lose hours. 

Specifically, CBO finds that raising the ACA’s threshold for full-time work from 30 hours a week to 40 would make a shift towards part-time employment much more likely – not less so.  As CBO notes, “Enacting H.R. 2575 would probably provide an incentive for some employers to redefine work hours so that more employees would be categorized as part-time. … Because many more workers work 40 hours per week (or slightly more) than work 30 hours per week (or slightly more), the changes made by H.R. 2575 could affect many more workers than are affected under current law.”

The Center on Budget and Policy Priorities has come to the same conclusion as CBO.  The Center concludes, “Only about 8 percent of employees work 30 to 34 hours a week …., but 43 percent of employees work 40 hours a week and would be vulnerable if the threshold rose to 40 hours.  … Thus, more than five times as many workers would be at risk of having their hours reduced if the standard for full-time work went from 30 to 40 hours.”  

Proponents of H.R. 2575 like to cite a list, kept by investors.com, of 401 employers that have said they have cut hours due to the ACA.  These anecdotes don’t bolster proponents’ claims.  In a country with about 7.5 million employers, 401 employers represent less than 1/100 of one percent.  As the overall national data has shown, there are fewer part-time workers today than when ACA was enacted.  Furthermore, when one looks at this list of 401 employers, most of them are in the struggling public sector – such as school districts.  By contrast, in the private sector, the chief financial officers of 500 companies recently said that the Affordable Care Act will have a limited impact on their hiring decisions.

Finally, proponents of H.R. 2575 claim that the Affordable Care Act is the only federal law that doesn’t use a 40-hour work week as the threshold for ensuring benefits for employees.  However, this GOP claim is false.  With the exception of overtime protections, federal labor statutes do not rely on the 40-hour work week as a threshold for protections or benefits for employees.