Investigation of Companies Reducing Hours Due To Health Care Reform

Contact us to learn more about this investigation.

SUMMARY OF INVESTIGATION

Block & Leviton is conducting an investigation of companies that reduce their employees’ hours or terminate employees in an attempt to avoid certain requirements of the Affordable Care Act. Under the Affordable Care Act, employers with 50 full-time employees or a combination of full-time and part-time employees that is equivalent to at least 50 full-time employees (for example, 100 half-time employees equals 50 full-time employees) generally are required to provide health benefits to their full-time employees originally set for January 1, 2014, but now delayed until January 1, 2015. (This is intended only to provide a general statement about the law’s provisions. For more complete information, see the IRS Q&A and/or the DOL Technical Release.)

According to a variety of surveys reported in the news media, numerous companies have reduced or are planning to reduce their employees’ hours in order to avoid the cost of providing these employees with healthcare benefits. A Businessweek article on November 13, 2013 reported that the International Franchise Association and the U.S. Chamber of Commerce commissioned a survey of companies which suggests that a number of employers have already cut hours and replaced full-time employees with part-timers to avoid the mandate. Similarly, a survey by the International Foundation of Employee Benefit Plans published in September 2013 found that 15% of large employers (50 or more employees) had plans to adjust hours so that fewer employees qualify for full-time medical insurance under the ACA. As reported by Fox Business News, Mercer, a human resources consulting company, conducted a survey which found that 12% of all U.S. employers reported plans to reduce workers’ hours as a direct result of the Affordable Care Act. According to these articles and surveys, this practice appears to be most pervasive in the restaurant and retail industries. In fact, Investors.com has compiled and is continuing to compile a list of employers who have or are planning to do so.

The Heritage Foundation (a right-wing “think tank”) published an article in The Foundry, its public policy news blog, suggesting that “companies with 50 or more employees can avoid Obamacare’s mandate by cutting workers’ hours below 30 hours per week.” The author does not appear to be a lawyer or have any legal training nor does the article provide any legal analysis.

The Employee Benefits Group at Block & Leviton is investigating whether such policies violate the Employee Retirement Income Security Act (“ERISA”), specifically its provision prohibiting adverse employment decisions against any person who is or may become entitled to benefits under ERISA. Block & Leviton’s investigation includes persons whose employment has been terminated or whose hours have been reduced now even in advance of the implementation of the employer mandate.

WHAT INFORMATION DO WE NEED FROM YOU

We will want to obtain some information in order to investigate your claim, including the state in which you reside and work and any documentation indicating that your hours have been reduced.

WHOM TO CONTACT FOR MORE INFORMATION

If you are an employee who has been terminated or whose hours have been reduced (below 30 hours) in response to healthcare reform (even if that reduction has been prior to January 1, 2015) or if you know other employees’ employment has been terminated or hours have been reduced (to allow your employer to avoid providing you with health coverage under the ACA), you may want to contact one of the following persons for more information:

R. Joseph Barton, Esq. (jbarton@blockesq.com)
Ming Siegel, Paralegal (ming@blockesq.com)
Block & Leviton LLP
1735 20th Street NW
Washington DC 20009
(202) 734-7046

Contact us to learn more about this investigation.

Block & Leviton LLP
155 Federal Street, Suite 400
Boston, MA 02110
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