Thomas Connery said reducing the work hours of part-timers to avoid bigger health insurance bills was an unpleasant, but necessary, businesses decision at New England Motor Freight.
He said businesses confronted with similar circumstances, particularly those with a large number of part-time employees, should do the same.
“Ultimately, you have to err on the side of caution,” said Connery, chief operating officer for Elizabeth-based NEMF. “Reduce the hours of part-timers until you see what the impact is going to be. There are too many uncertainties for businesses to gamble. We elected not to gamble.”
The Affordable Care Act, most of which goes into effect in 2014, requires employers to provide full health coverage to employees who work 30 or more hours a week.
Providing health benefits for full-time employees costs NEMF an average of about $17,000 in annual premiums, a price Connery said was too steep to provide part-time employees who currently don't get such benefits.
“We can't afford it,” Connery said. “It's just not an option.”
Decisions to cut hours like those enacted at NEMF can ruffle feathers, especially for family-owned businesses who strive for closer relations with their workforces.
Connery, who runs daily operations for the family-owned business run by Myron Shevell, said the reductions caused tension among certain part-time workers who depend on NEMF jobs for their primary income.
Managers informed their respective divisions of the cutbacks, enacted June 1. About 400 employees were affected.
“You need to explain that it's out of your control,” Connery said. “That's what we did.”
Connery said the company did offer wage increases for some of the affected employees, though it wasn't enough to offset the reduced hours. Connery added that most part-time dock workers at NEMF have other full-time jobs, making it less of an issue for them.
Connery said the nature of the trucking business requires the flexibility of employing a substantial number of part-time workers.
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