Restaurants Stock Shifts With Part-Time Employees

More foodservice establishments are adding part-time workers instead of full-time employees ahead of the Affordable Care Act’s full enforcement.

July 17, 2013

WASHINGTON – At Ken Adam’s 10 Subway restaurants in Michigan, the face of his workforce is changing to more part-time employees. Since May, he’s brought on around 25 part-time workers, while reducing hours for some employees — all because of the coming full enforcement of the Affordable Care Act, the Wall Street Journal reports. 

The good news is that restaurants and bars have been hiring more workers, but some economists see the uptick in seasonal and/or part-time workers as troubling. Overall, the hospitality and leisure industry has added more employees than any other sector last month, according to the U.S. Department of Labor. 

“I'd be surprised if the Affordable Care Act didn't have something to do with” the increase in hiring part-time workers, said Paul Dales, senior U.S. economist at Capital Economics. “Companies don't want to pay for health care unnecessarily if they can avoid it, so they'll try to avoid it.” But he cautioned that the effects “will be harder to discern in the data.”

Over the whole U.S. workforce, companies have hired more part-time employees so far in 2013 than full-time workers. Last year, employers brought on more full-time workers. Earlier in July, the Obama administration said companies not meeting the new health insurance mandates would have a year’s reprieve from paying penalties.

However, restaurateurs who have started moving toward more part-timers indicate that they will stick to that strategy. “Since passage of the ACA, we've increased the number of our part-time employees, although we haven't fired people to do so,” said Andy Puzder, CEO of CKE Restaurants Inc., which runs Hardee’s and Carl’s J. 

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