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Obamacare Impact on SMBs – Less full time staff & scheduling challenges

December 7, 2012

If you own a business with 500 hourly employees, can you afford $1 million in fines?

The reality of PPACA and its impact on Small & Mid-sized Businesses is now a major concern for business owners. While the actual laws and costs are still unclear, requiring healthcare coverage for all employees working over 30 hrs per week, will dramatically increase labor costs for those with many hourly, part-time workers who often have varying, flexible schedules. Business owners are now handcuffed by uncertainties for 2013 – limiting their budgeting and planning abilities. Many have frozen spending, investment and hiring plans for next year, while others are forced to consider layoffs or reductions in hours for workers. 

The retail and dining industries are getting most of the media attention due to the high percentages of hourly workers. But while large chains like Darden Restaurants (Olive Garden, Red Lobster) and Cheesecake Factory are highlighted for their plans to address the changes, it’s the SMBs like this Las Vegas-based restaurant that will most likely be the hardest hit.

Businesses are now weighing the pros and cons of limiting the hours their employees can work; the cost of hiring more part time workers to fill the void; and the potential impact on quality and/or customer service. While there are no blueprints for how every business adapts to the new healthcare laws, there are steps organizations can take to prepare and manage their labor costs through the transition – the most obvious being strict controls on how many employees can work over 30 hrs per week.

Automate labor tracking, scheduling and with the cloud

Organizations cannot afford to not have actual, auditable data on every hour each of their employees has worked, and what they are scheduled to work. Paper-based systems are no longer an option.  This visibility is critical in organizations looking to stay on top of hours scheduled, hours worked and what the total will be at the end of a shift – for every employee. Without an automated system, even a 20-person company will be challenged with this burden. This is why a top strategy for small businesses is to move to an automated, cloud based payroll system ASAP.

Now is the time to consider your back office systems for employee scheduling, time tracking, payroll and benefits administration. The nominal investment in a cloud-based system can save hundreds of thousands of dollars in additional benefits costs, compliance fines and additional hiring charges – not to mention the employee, administrative and management productivity gains.

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