Congress votes to bring 'full-time' definition back to 40 hours

April 3, 2014 | by Alicia Kelso

The U.S. House of Representatives voted today in favor of H.R. 2575, AKA the Save American Workers Act, which would bring the definition of a full-time employee back to 40 hours a week. The definition was changed to 30 hours under the initial Affordable Care Act bill.

Nearly every restaurant and retail organization supports the SAW Act, which was introduced by Congressman Todd Young (R-In.).

In a statement released earlier this week, the National Restaurant Association called H.R. 2575 a "key vote" and top priority for the industry.

"Aligning the law's definition of full-time employee status with current levels used by restaurant and foodservice operators would help avoid any unnecessary disruptions to employees' wages and hours, and would provide significant relief to employers," NRA EVP of Policy and Government Affairs Scott DeFife wrote to members of Congress.

In a February interview, DeFife said more than 200 co-sponsors — both Republican and Democrat — support this bill.

He said the 30-hour frame was chosen because it worked better within the budget math, but added that 40 hours is more cost effective for operators.

Also at issue are the unique hours of the retail and restaurant industries.

"You take the shifts as they come; you do what you need to do to meet that demand. Sometimes that's 30 hours, sometimes it's 36 hours or 40 hours," DeFife said. "Operators want us to work for this new (30-hour) definition. Thirty hours is not a number anyone has had to work with or worry about before."

Variable hours a concern across multiple organizations

The bill is also supported by the National Association of Convenience Stores, which claims the change back to 40 hours will make it "significantly easier to provide flexible schedules and manage your workforce."

"A common characteristic among convenience retailers is that most businesses do not employee a traditional 9-to-5 workforce," the NACS wrote to Congress.

The NACS also argued that changing the full-time definition from 30 to 40 hours, would:

  • Make it easier for employers to provide more hours to all employees, thereby increasing their take-home pay.
  • Help employers offer more generous health-care coverage to full-time employees without making premiums prohibitive.
  • Help ensure that lower-income employees have access to more affordable health-care coverage options.

The National Retail Federation called the SAW Act "a common sense approach," and said the 30-hour definition is difficult for the industry because of the large number of employees who work variable hours.

In addition to seeking a 40-hour definition for full-time workers, NRF has supported legislation that would limit the law to companies with 100 or more full-time workers rather than 50.

The National Council of Chain Restaurants (a division of the NRF) added that the 30-hour definition is both "peculiar and restrictive."

"The 40-hour workweek is a time-honored American tradition ingrained in our laws and culture ... An unfortunate consequence of the ACA's aberrant 30-hour definition has been a reduction in work hours for many employees and difficult and complicated calculations required for chain restaurant businesses to be in compliance with this requirement," the NCCR's Executive Director Robert Green said in a letter to Congress.

"The 40-hour full-time definition proposed in H.R. 2575 will allow employers to make rational decisions about staffing levels in their restaurants and will provide employees additional and needed opportunities to work additional hours."

The fight continues

Now that the vote has passed in Congress, it moves onto the Senate for debate. The White House, however, said earlier this week that the bill will be vetoed. The White House cited analysis from the Congressional Budget Office that said the bill will "increase the deficit and result in lost health insurance coverage."

"This legislation would increase the deficit by $74 billion and force 1 million people to lose their sponsored healthcare coverage and increase the number of uninsured. It is not true that under this piece of legislation no one would lose their healthcare," Rep. Louise Slaughter (D-N.Y.) told The Hill.

The NRA today said it looks forward to continuing its work with Congress to "address practical problems with implementation of the health care law for main street businesses and urge(s) the Senate to move this legislation forward."

Topics: Operations Management, Staffing & Training

Alicia Kelso
Alicia has been a professional journalist for 15 years. Her work with, and has been featured in publications around the world, including NPR, Good Morning America, Voice of Russia radio, and Franchise Asia magazine. View Alicia Kelso's profile on LinkedIn

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