Staples, the office supplies giant and the third-largest e-commerce retailer in the US, has been in the news recently—and not in a good way. Several of its part-time employees have alleged that they were threatened with dismissal for working more than 25 hours a week. Some in the media have speculated that the company’s actions were part of an effort to avoid having to provide healthcare coverage under the Affordable Care Act (ACA) to employees on the cusp of working 30 hours a week.
President Obama publicly weighed in on this issue, saying “It’s one thing when you've got a mom-and-pop store who can't afford to provide paid sick leave or health insurance or minimum wage to workers—even though a large percentage of those small businesses do it because they know it's the right thing to do. But when I hear large corporations that make billions of dollars in profits trying to blame our interest in providing health insurance as an excuse for cutting back workers’ wages, shame on them.”
The ACA’s Shared Responsibility provisions for employers with 100 or more full-time employees—defined as those working 30 hours or more a week—kicked in this year. Under these provisions, employers are liable if they fail to provide employees working more than 30 hours per week on average with affordable health insurance coverage that provides minimum essential value. In 2016, companies with 50 to 99 employees will also be included under the provisions of the Act.
What Staples should be doing:
First, Staples needs to clarify its policies regarding part-time workers and clearly communicate them to all its employees and managers. The company is well within its rights to restrict its part-time employees to a 25-hour work week. However, they could have handled this situation better, rather than putting the responsibility on its part-time employees to keep track of their weekly work hours, and threatening to terminate them for going over their stipulated limit.
Second, Staples needs to focus on actual hours worked by employees, rather than just scheduled hours. During busy times of the year, the company may need their part-time workers to put in more hours. This help can balance its need to control workforce and healthcare coverage costs with their part-time employees’ need for a sufficient, stable income.
Third, the company needs to use a system that is capable of accurately tracking work hours and sending instant overtime notifications to employees and managers alike, allowing for necessary actions to prevent unwarranted overtime work in the first place.
Finally, Staples needs to have automated time tracking systems and reporting structures in place so that they know who is eligible for healthcare coverage, and who is not. It can be very time consuming for an organization with thousands of employees to compile raw data to define who is eligible for coverage under the ACA. Automated systems can dramatically streamline the process by performing automated calculations based on real time work data.
Compliance burdens can be managed with the right tools.
With the stringent and often complex requirements of the ACA and other recently introduced laws, managers today must balance business profitability with compliance regulations in a practical and cost-efficient way. Fortunately, solutions like Replicon can help them avoid expensive litigation, adverse publicity, and keep both employees and investors happy.