The Forever 21 clothing retail chain is battling employees' claims - and fallout on Facebook - that it is demoting full-timers to part time to avoid costs under Obamacare.
A memo recently released to staffers detailing the demotions is getting lot of attention. Forever 21 says it is simply realigning its staff and adjusting payroll to reflect a drop-off in projected store sales. The chain’s stores are found in major malls, including those around metro Atlanta.
“After a recent evaluation, Forever 21 realigned its staffing needs to better reflect sales expectations,” the company said on Facebook. “This realignment impacted less than 1% of all U.S. store employees.” According to Forbes, it had 30,000 employees and $3.4 billion in sales last year.
A memo to employees said a number of full-time sales, stock and maintenance associates, accessory specialist and cashier positions would become part time effective this pas t Sunday.
Not only will part-time hours not exceed 29.5 a week, employees will no longer receive medical, dental and vision coverage.
A growing number of companies say they are cutting full-time workers or making them part time because they will not able to provide health care coverage under the Affordable Care Act, the formal name of Obamacare. Starting in 2014, some businesses with 50 or more full-time or full-time equivalent employees that do not offer health coverage to those employees may face penalties. A full-time employee for the purposes of Obamacare is one who is employed an average of at least 30 hours per week.
Forever 21 was catching heat on its Facebook page. Many comments were similar to this one from Danny Smith: “If you can't give back to your employees then I will shop somewhere else” and this one from Carlos Alvarez: “Forever Banned.”
But there was also this comment from Gracee Hartsock: “Just wanted to say I'm loving your sales recently!”
Is Forever 21 cutting jobs due to Obamacare or is it just a coincidence hours won’t exceed 29.5?
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