Friday, November 09, 2012

Living with Obamacare...

...for very liberal temporary attorneys in Washington D.C.

Liberal contract attorneys might want to consider what "live with it" means. Under Obamacare, companies with 50 or more full-time employees either have to provide them with government-approved health insurance policies, or pay a per-employee fine. Further, the fine kicks in at the 31st employee, not the 51st, and it starts at $2,000 per year per employee. It goes up later. Companies, therefore, are discouraged from having full-time employees, or at least 50 or more of them. Hello, part-time employment. Think I'm fucking with you? Think again.

While you're thinking again, start thinking about the industry in which you work. Obamacare, unlike other government regulations, defines a full-time employee as one working 30 hours a week. Every temp agency in town worth a shit has 50 people working "full-time" in any given year under that definition. If you think that temp agencies will give you employer-funded health insurance that meets Obamacare standards (hint: lots of mandates make insurance less affordable), you are delusional. They already didn't offer comprehensive insurance, which was cheaper before Obamacare started affecting rates, so they won't start now. They also are not going to pay the penalty. Margins are too thin. What will the agencies do?

There are only two choices. First, nobody works 30 hours a week for an agency ever again. That probably is an unworkable solution, but it is not unthinkable, given the trend in the industry toward a 40-hour cap on projects. A 30-hour cap would mean more bodies, staggered, but would not be a dramatic departure from the no-OT policy that already governs so many projects. Given the staggering costs of forced health coverage (or penalties), agencies won't consider this option unworkable. They'll think about it, and you'll have to start finding two projects at a time to make a living wage. Assuming, of course, that agencies and the firms that hire them stop enforcing their concurrent employment policies that ban working two projects at a time.

The second choice is, your taxes just got harder. Agencies could deem contract attorneys to be independent contractors and start issuing 1099s instead of W-2s. That means you'll have to make quarterly estimated tax payments for withholding, Social Security and Medicare taxes. Oh, and by the way, it also means you'll be responsible for the employer's half of those Social Security and Medicare payroll taxes, as you will now be self employed. Of course agencies will raise your rates to make up for the fact that your share of the payroll taxes doubled while their share disappeared. Don't doubt it for a second. Yeah, you're fucked.

One way or another, you're fucked. Temporary employment as we know it is unlikely to survive Obamacare, at least as it is currently structured. That's not my opinion, that's what temp agency heads said to Congress. I suggest you read the entire transcript. These guys have a pretty good idea of how Obamacare will fuck their industry and, by extension, you.

They are going to scream about unfairness but are never going to figure out why they can't find work.

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