The Numbers to Avoid

We reflected briefly on Obamacare's costly disincentive for small employers to expand beyond 49 "full-time equivalent" workers. Another threshold is 30, the number of working hours per week that distinguishes the full-time from the part-time worker. These are the numbers to avoid, per the WSJ:

Because other federal employment regulations also kick in when a firm crosses the 50 worker threshold, employers are starting to cap payrolls at 49 full-time workers. These firms have come to be known as "49ers." Businesses that hire young and lower-skilled workers are also starting to put a ceiling on the work week of below 30 hours. These firms are the new "29ers." Part-time workers don't have to be offered insurance under ObamaCare.

The additional cost of that 30th hour or that 50th worker can be several thousands of dollars, a very high incremental payroll cost to an employer at the lower end of the wage spectrum (e.g., restaurants, not law firms). Avoiding crossing these boundaries, legally, will be a principal aim of every CPA for his client. We hope that the dismal unemployment rate falls soon, but the improvement is very unlikely to come from small business. © 2013 Stephen Yuen