The Affordable Care Act and Economics of the Part-Time Workforce: Measuring the Impact of the ACA

The Impact Thus Far of the ACA on Employee Hours Is Not What Many People Expected

As employers prepared for the 2015 effective date of the Employer Shared Responsibility provisions of the Affordable Care Act (ACA), some industry observers predicted companies would move many employees (who worked 30 to 34 hours a week) into higher or lower hourly categories. Restricting employees to fewer than 30 hours would allow employers to avoid the costly requirement of offering health coverage. On the other hand, permitting employees to work 35 or more hours would contribute to improved labor utilization. Are companies restricting employee hours to avoid the requirement to provide ACA-approved health care coverage? Is the part-time workforce growing faster or slower than the full-time workforce? How is the search for talent affecting decisions regarding employee hours? How much of a role is the economy playing in employer decision making? Are employers in some industries shifting employee hours, based upon ACA consideration or other factors? To uncover the answers to these questions, the ADP Research Institute®, a specialized group within ADP®, studied aggregated and anonymous payroll data from 2013 and 2014. The study encompassed 10 million active hourly employees at 75,000 companies, including full- and part-time workers. The findings of the study revealed that the ACA’s impact on employment policy is not what many people expected.

White Paper Reveals a Strong Focus on Attracting and Retaining Talent

While employers have committed significant time and resources to meeting the requirements of the Affordable Care Act, many apparently are not making it their sole priority to restrict employees’ hours in order to avoid the ACA requirement of providing health care coverage to those over the 30-hour threshold. In many instances, the ACA is not an overarching driving force. The ADP RI study found that employers are placing a strong emphasis on acquiring and retaining talent, as U.S. full-time jobs, according to the U.S. Bureau of Labor Statistics, increased between 2010 and 2015, while the number of part-time jobs decreased slightly. In fact, the whitepaper reveals that, among workers in all hourly categories – below and above 30 hours worked per week – there was little to no change in the percentage of workers in any category. Moreover, an analysis of the study suggests that employees wanting to work full-time were in a better position to find full-time positions in 2014 than in 2013 – even as ACA compliance preparations were ramping up. The whitepaper also presents other operative factors, besides the ACA, that are affecting employer staffing and workforce planning in the United States. Read the full whitepaper for full details.

About this Report: This report is based on aggregated and anonymous data from approximately 75,000 U.S.-based client organizations. Researchers used payroll data from 2013 and 2014. All the quarters had similar descriptive statistics.

The study captured information from approximately 10 million active hourly employees working for a single organization having 50 or more employees. By leveraging actual data representing multiple industries across all 50 states, the research presents a snapshot of the part-time workforce and provides valuable insights. For purposes of this report, the ADP Research Institute defined part-time work as fewer than 35 hours per week.

Tags: Benefits Administration