ObamaCare Biting Apple?

An August 15th article on ifoAppleStore.com reported that “numerous tipsters” in the UK and later the USA indicated Apple’s recently-hired Vice President of Retail, John Browett, initiated a number of staffing actions at Apple retail stores; specifically:

  1. Cease all recruiting and hiring events
  2. Make no promotions
  3. Immediately lay off newly-hired employees who are still on probation
  4. Reduce available hours for part-time employees
  5. Reduce or eliminate available overtime
  6. Lay off or fire employees who can only work more than 32 hours a week and not part-time

(In the above list, quoted from ifoAppleStore’s article, the emphasis is mine).

Although ifoAppleStore.com soon reported Mr. Browett admitted he made a mistake and “rescinded” those actions, the last three “actions” on his list caused me to pause and wonder: Did Apple consider these actions to increase the profitability of their retail operations (as reported)… or, were they starting to mitigate the potential increased costs of ObamaCare when it takes full effect in 2014?

After all, by now it’s well known that the “Affordable Care Act”, or “ObamaCare”, is anything but affordable: It mandates health care insurance for everyone, compels companies of 50 or more full-time employees to offer insurance, requires insurers cover preventive care, preexisting conditions, and birth control, limits insurers’ profits and overhead costs to 20% of revenue, burdens America’s healthier youth by making them purchasing more coverage than they need, levies fines on those who do not purchase insurance, and will hire legions of new IRS employees to enforce it all. (If it’s not well known to you, here’s one of a number of excellent summaries on the true costs of ObamaCare).

One way a company can avoid the penalty is to make sure they have no more than 50 full-time employees. For larger firms (like Apple), they can minimize their added costs by doing exactly what Mr. Browett instituted – in essence, a company taking those first steps towards a workforce of part-time employees in a nation which eventually may follow suit.

Now, there’s very little chance that an extremely successful, highly profitable firm with over 40,000 “full-time-equivalent”* employees would convert all but 49 of them to (a) part-time, (b) laid off, or (c) fired. But, it does pose an interesting question: Was Apple’s staffing actions really just a “mistake”, or is it a harbinger of what’s to come in the employment market with the advent of the “Patient Protection and Affordable Care Act (PPaACA)”?

* “Fulltime Equivalent” = If four (4) part time employees are working 10 hours each per week, the represent one “full time equivalent” employee working a 40-hour week.

Update: Perhaps Apple’s (now-rescinded) actions were a warning of things to come after all: It appears that Darden Restaurants (owner of Olive Garden, Red Lobster, LongHorn Steakhouse, and other food chains) and Sears are reacting to ObamaCare’s anticipated higher health care costs by giving their employees vouchers to offset the cost of their health care premiums and/or cutting back employee hours below 30.5 per week. And, this could be just the beginning.

Thanks for reading!

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