Recently I came across a few articles of companies looking to find ways to circumvent the fines imposed by the company mandate. As I investigated the story line I realize that the impact of the ACA also affects companies like my own enterprise. Since we have several consultants who work as independent contractors we are now subject to hire and provide them with healthcare if they request it.
This adds @ 100k to our Human resource budget to comply with the ACA terms. For a small company doing less than a million in net profits this is a major blow. Now when you multiply the effect to the companies who have provided many employees with healthcare plans that are no longer eligible due to new cost structure you see the implications.
Its a tragedy when you change the level of issuance of an optional benefit. The perception to your workers is not something you can easily change once tarnished. I watched a fast food worker demand that she be paid $15 per hour for her services and I wanted to take her to an executive training camp and allow her to see that in order for the burger to sell at $1.00 to the customer her wage has to remain at that price otherwise their fast food establishment becomes a premium restaurant and the price of the lowest burgers go to a price of $5.00 and the chances of her getting a job there would decline since the level of services would now increase. There is a major difference in being a waiter or waitress and being a fast food attendant. The clientele and level of service is far and beyond the scope of each other. In addition the presence of tips is also a factor in most restaurants.
When I analyzed the situation the first thing I began to realize is how special it is to have management training. Managers have to keep a balance between the costs and profits. A successful company makes at least 7% to 10% profit goals. So lets do the numbers thats a goal of .10 cents per burger.
Legislation has always provided protection to consumers but from the business point of view they have to bear the costs. Small businesses have no chance in an over regulated economy.
I think many regulations offer a balance approach however we are in need of a few relaxation of restrictions to continue as a profitable stable economy. The SEC offers a major protection for investors and this is a needed function in these markets however the limitations they place on the advisors are reducing the number of advisors yearly.
When legislation hurts an economy its time to create new rules that address the pain.
The question is this: Is the Government hurting your business?
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