Policy: Labor

74% of small businesses will fire workers, cut hours under Obamacare

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Paul Bedard,Washington Secrets,Obamacare,Jobs,Labor,Health Care

Despite the administration's controversial decision to delay forcing companies to join Obamacare for a year, three-quarters of small businesses are still making plans to duck the costly law by firing workers, reducing hours of full-time staff, or shift many to part-time, according to a sobering survey released by the U.S. Chamber of Commerce.

"Small businesses expect the requirement to negatively impact their employees. Twenty-seven percent say they will cut hours to reduce full time employees, 24 percent will reduce hiring, and 23 percent plan to replace full time employees with part-time workers to avoid triggering the mandate," said the Chamber business survey provided to Secrets.

Under Obamacare, just 30 hours  not the nationally recognized 40 hours  is considered full-time. Companies with 50 full-time workers or more are required to provide health care, or pay a fine.

The administration recently decided to wait a year before businesses had to comply, but many are trying to get ready anyway. The president did not delay the mandate that Americans must have health insurance or pay a fine, however.

The Chamber's second quarter small business survey found that just 30 percent are ready for the law and even understand what is required.

Dealing with Obamacare is the biggest worry of small businesses and comes as they continue to see a sluggish economy which has already put a brake on their hiring. Just 17 percent reported adding employees in the past two years. And only one-in-five small business owners believe that they will add employees in the next two years.

The Chamber added that "nearly one-in-four employers say the health care bill is their biggest obstacle to hiring more employees."

Other key findings from the Chamber survey:

 77 percent continue to think the U.S. economy is on the wrong track. However, small businesses are more optimistic about their local economy and individual business.

 The majority (61 percent) of small businesses do not have plans to hire next year.

 Concerns about regulation have increased significantly from 35 percent last quarter to 42 percent now.

Small businesses are looking for leadership on issues that will remove barriers and encourage growth.

 88 percent of all small businesses support addressing entitlement spending to resolve America's growing financial challenges and escalating debt.

 83 percent support congressional efforts to reform the tax code — with the majority focusing on making it less complex.

 81 percent of small businesses surveyed believe the immigration system is broken and needs to be reformed.

 In contrast to the president's recent speech pushing new energy regulations, 90 percent of small businesses support easing EPA regulations and opening up more federal lands for drilling.

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Methodology/The Q2 U.S. Chamber of Commerce Small Business Outlook Survey was conducted online between June 21 - July 8 by Harris Interactive among 1,304 Small Business Executives (defined as executive level position in a company with fewer than 500 employees and annual revenue less than $25 M).

Paul Bedard, The Washington Examiner's "Washington Secrets" columnist, can be contacted at pbedard@washingtonexaminer.com.

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