Temp Agency: Obamacare Is Causing Businesses to Hire Part-Time, Not Full-Time, Employees

Under pressure to comply with the Affordable Care Act, some South Carolina businesses are cutting back by hiring more part-time rather than full time employees.

Although unemployment levels have dropped to pre-recession levels at 6.1 percent nationally, a staffing agency in South Carolina reports that this number may be skewed. Many employees have returned to work, but in new part time positions.

Billie Baggett of IHT Staffing, a temp agency located in Myrtle Beach, told WMFB News that the Obamacare is to blame for the shrinking work week. “I would say 90 percent of our employers, businesses today, are hiring part-time as opposed to full-time, because of the Affordable Healthcare Act,” said Baggett.

A key provision of the 2009 law, the employer mandate, requires all business with more than 50 workers to provide healthcare benefits to full-time employees. The law defines a full time employee as any employee who logs more than 30 hours a week.

The Obama administration has delayed implementation of the employer mandate until 2015 but Baggett believes that it still discourages business from filling full time posts. “It’s not something a corporation wants to do,” he says.

James Sherk, a senior economic analyst at The Heritage Foundation, agrees. Sherk notes that the employer mandate has already affected the job market and predicts additional disadvantages.

“Obamacare will further reduce hours by increasing the costs of hiring full-time employees while discouraging workers from working full-time,” remarks Sherk. “Fewer work hours will impede income mobility for low-wage workers.”

The South Carolina experience may not be an isolated incidence. Earlier in February, Forbes reported that the Obamacare mandate might be fueling a shift to part-time hiring in Illinois.