The New Year began with our political leadership in Washington, DC finally reaching an agreement on a permanent tax cut for 98% of Americans. No longer will it be known as the temporary Bush tax cuts. It was not pretty to watch, but it was instructive. It marks the first of many more compromises that will be made during the year to begin the process of reigning in deficit spending and stabilizing our Nation’s debt crisis.
What does this mean to the U.S. economy and to employment for 2013? Essentially, it is good news. This should not be as a surprise for most of our readers, but it probably means more of what we experienced in 2012. A slow growing economy with employers cautiously hiring for critical positions, while trying to understand how the Affordable Care Act (ACA), better known as Obama Care, will impact their costs and employee insurance plans.
Most economists agree with this scenario of slow growth with the possibility of the economy picking up speed later in the year if the private sector gains confidence in the future stability of the U.S. economy. WageWatch will have more to say about the economy and the impact it will have on this year’s wage increases for the hotel and gaming industries when we publish our Employment Forecast 2013 next week. The forecast is based on our survey of over 4,000 properties late last month.
Looking at other trends for 2013, clearly, the ACA has garnered the most headlines during the year. As we have previously reported, if you are a small business with 51 or more full time employees, you will be fined $2,000 per employee, excluding the first 30 employees, if you do not offer insurance for employees that work an average of 30 or more hours each week. For small businesses with 50 or fewer employees, there is no penalty. Small businesses of all sizes are also not required to provide insurance for part-time employees. We are already beginning to see examples of employers cutting back on the number of fulltime employees by reducing their hours. Also, look for small businesses with more than 50 employees to reduce their workforces or change the structure of their companies.
One bit of good news is the IRS ruled this past Monday that affordability does not extend to fulltime employees’ families. Under ACA, employers will have to offer insurance that is certified affordable only to employees. To be certifiable as affordable, the premium for each employee’s plan cannot exceed 9.5 percent of their total household income. If the insurance coverage doesn’t meet the affordability law, employees will be offered tax credits to purchase insurance on their own. Business owners will then have to pay whichever is less: $3,000 per employee that receives the credit or $2,000 per employee, excluding the first 30 workers.
Finally, WageWatch welcomes our newest employee, Debra Anundson, who joined us on January 1st as our new Manager of Compensation Analytics. Debra was with Interstate Hotels & Resorts for 22+ years, where she served in many capacities in Compensation and Benefits at the corporate office, managing all facets of their compensation, health & welfare and retirement benefits. She created salary structures for exempt and nonexempt positions in all divisions as well as the corporate headquarters. You can read more about Debra in the press release.
WageWatch, Inc. is the leading compensation survey provider for the lodging and gaming industries with over 6,000 properties in our database participating in its PeerMark™ Wage survey. WageWatch also conducts compensation surveys the healthcare, staffing and non-profit industries. The PeerMark™ Wage Survey is the only Web-based custom survey tool that allows individual survey participants to select their competitive set for comparison purposes.