How the ACA Affects the Hotel, Restaurant and Staffing Industries

The Affordable Care Act can be difficult to implement for many companies; it is even more so for companies with many part-time and variable hour employees. At the Employer Healthcare & Benefits Congress, a panel met to discuss the problems faced by staffing agencies, hotels and restaurants in implementing healthcare reform. The presenters included Michelle Reinke Neblett, Senior Director, Labor & Workforce Policy, National Restaurant Association; Edward A. Lenz, Senior Counsel, American Staffing Association; Brian Crawford, Vice President of Government Relations, American Hotel & Lodging Association.

Crawford summed up the issues faced by the hotel industry as the complexity of the rules, the hours worked by employees and the expansion of costs. It may seem hotels have a team able to take care of these issues, but most hotels are run by individuals or families; discussing the issues at their dinner table at night like they do their budget. They simply do not have the staff to accomplish many of the reporting and calculation, let alone have the ability to pay for the coverage many of their employees are now eligible for. “The only chance is to get smart on the regulations, or face the penalties,” as Crawford said.

While staffing agencies have the same problems, they also face a unique challenge. Staffing agencies send their employees to work for other companies. This has not been a problem as the agency is the “common law employer,” but this issue becomes less clear with the ACA. Who is actually the employer in terms of services rendered? Staffing agencies also face the belief that employers can hire temporary workers and not have to comply with ACA. “There are a lot of reasons to use a staffing agency, but avoiding the ACA is not one of them,” said Lenz. This comes back to the common law trouble, making this a problem that needs an answer before they can move forward.

Restaurants, are some of the largest employers in the U.S.; employing 13.5 million people. That is roughly 10% of the U.S. workforce. They face similar issues as the hotels, with 70% of restaurants owned by single unit operators. Within the restaurant industry, the employees, mostly young with over 50% below the age of 30, largely operate on flex schedules. Many restaurants operate at 100 – 120% turnover rates. “The law was written for a typically 9 – 5 workforce,” said Neblett. For the restaurant industry, that’s like trying to fit a square peg in a round hole.”

It becomes clears that the issues these employers face is in calculating hours and determining whether or not their workers are full-time employees under the law.  There is also the fact that many of these companies simply cannot afford to offer their employees insurance, which puts them in a situation where they will have to pay fines. These three organizations are all members of Employers for Flexibility in Health Care (E-FLEX) who represent the interest of these groups.