The Domino Effect: Healthcare Reform’s Impact on Job Market and Rise in Unfair Termination

By: Louis D. Tambaro

Have you recently noticed a difference in the way your employer handles staffing and hiring for the business?

Have you witnessed or heard rumors about significant middle management layoffs or threats of layoffs?

Has your company resorted to the hiring of inexperienced part time workers in lieu of full-time workers that historically performed the same work?

The reason may be the current healthcare situation in the United States and the way employers are reacting to it. The Affordable Care Act (also commonly referred to as Obamacare) has been making waves since the beginning of 2012 and has raised numerous questions about the future of healthcare and health insurance in the United States. Not surprisingly, such a dramatic sea change in the manner in which individuals and their employers apply for, pay for and manage their healthcare coverage has caused a ripple effect in connection with staffing changes, down-sizing, layoffs and terminations.

Indeed, in a 2013 poll conducted by the U.S. Chamber of Commerce, an organization seventy-four percent (74 %) of small business owners polled (less than 50 employees) report that they will reduce staff or workers’ hours so that they don’t have to offer health insurance. While some “pundits” disagree with the Chamber of Commerce and suggest that the impact of Obamacare on business staffing will be insignificant, this view is flawed.

It cannot be ignored that representatives of a number of well-known businesses have gone on record to indicate that their future business plans shall include a shift from full-time to part-time employees. Such businesses include the well-known franchises/chains Buffalo Wild Wings, the Carl’s Jr. and Hardee’s hamburger chains, Subway, Wendy’s, and White Castle. Also vocal in their intent to change their employment practices are colleges and universities such as Kean University (NJ), Palm Beach State College (FL), University of Arizona in Tucson, Youngstown State University, (OH). Perhaps most vocal in their swift and drastic reaction against Obamacare is Regal Entertainment Group, which operates more than 500 movie theaters in 38 states and which has drastically reduced its full-time workforce and managerial staff throughout the country.

Further, hiring of part time employees in US businesses outnumbered that of full-time employees more than 4 to 1, an astonishing gap and a clear break from such ratios in prior fiscal years. Forbes.com has gone so far as to suggest that ObamaCare is turning the United States into a “Part-Time Nation.”

Who is most at risk?

In the corporate realm, statistics suggest that the middle aged, middle to upper management that has earned the title “vice president” or “manager” is most susceptible to this type of reactive layoff. Are you in this group?

Employees at this level are generally earning fairly significant salaries, are more expensive to insure, and, on some level, their comparative value to a company’s long-term vision is seen as a “diminishing return.” The apparent solution appears to be to replace and/or do away with such positions entirely. While certain companies, such as those discussed above, have been vocal and transparent in their policies, other businesses have been more subtle in their lay-off strategies. Instead of making the unpopular pronouncement that business changes are being made in response to legislative changes, we have seen an increase in employers targeting

What are your Rights?

While you may have heard otherwise, you are protected. In the state of New Jersey, individuals who are deemed members of a protected class, including but not limited to age (over 40 years), gender, race and national origin, receive significant protections under the New Jersey Law against Discrimination (LAD).

Marks & Klein, LLP has significant experience over the past twenty years protecting the rights of franchisees and employees who have been abused, discriminated against and terminated and we are well positioned to help you prosecuting your claims. M&K has also counseled large and small business owners for the last two decades to help them identify, manage, and deal with changes in the law that have required these businesses to adapt, change and educate themselves and their employees.

If you have been terminated and believe that you have been targeted in connection with such reactionary policies, but blamed unfairly for unsubstantiated attacks on your work performance, M&K can assist you in protecting your rights. Further if you are a business owner that has been affected by any of the recent changes to healthcare laws, you may also benefit from our counsel.

If you have questions or concerns, please feel free to contact the firm at 732-747-7100 for a free consultation and to further discuss your matter.