Status of House and Senate Legislation to Change Definition of Full-Time Employee

In the first week of January 2015, the U.S. House of Representatives and the U.S. Senate introduced legislation to amend the definition of “full-time employee” under the Affordable Care Act (ACA) to increase the number of hours an employee must work per week from 30 to 40 hours. The House approved the Save the American Workers Act of 2015 (H.R. 30) by a vote of 252 to 172. The bi-partisan Senate bill (Forty Hours is Full Time Act, S.30) has been referred to the Senate Committee on Finance.  Proponents of the congressional legislation argue that the ACA definition of “full-time employee” creates a perverse incentive for businesses to cut their employees’ hours below 30 per week to avoid the added costs associated with providing these employees with health coverage that meets the ACA affordability and minimum value requirements. Although the House and Senate are under Republican control, the legislation faces significant opposition and may not garner enough votes to survive an expected Senate filibuster or presidential veto.  Given this uphill battle, employers subject to the ACA’s employer mandate should continue their ACA compliance efforts.