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Small businesses to cut hours and workers due to Obama healthcare law, survey says

July 19, 2013|By Adolfo Flores
  • President Obama during a June statement about the Affordable Care Act on Friday in San Jose. The latest change gives employers an additional year before they must offer medical coverage to their workers or pay a fine.
President Obama during a June statement about the Affordable Care Act on… (Evan Vucci / AP )

Half of small businesses said they would cut full-time employee’s hours or replace them with part-time workers in order to avoid paying for health insurance under President Obama's healthcare law, according to a recent survey from the U.S. Chamber of Commerce.

Despite the Obama Administration’s one-year delay of the employer mandate to 2015, small businesses said it would negatively affect their staff, and only 30% said they were prepared for its implementation.

Because of the healthcare law, about 27% intend to cut hours to reduce full-time employees, 24% plan to reduce hiring and 23% expect to reduce full-time staffers with part-time workers to avoid having to comply with the mandate.

“Nearly one-in-four employers say the healthcare bill is their biggest obstacle to hiring more employees,” the survey of 1,304 small business owners said.

Story gallery: Healthcare law comes to California

As employer’s concerns about the economy remain the same, worries about the Affordable Care Act continued to rise. Anxiety over the law rose from 42% in January to 49% in June.

Only 17% of small business owners reported adding employees in the past two years and one-in-five said they will add workers in the next two years.  Another 61% told surveyors they don’t have plans to add staff in the next year.

Although views on the overall economy remain grim -- more than three-quarters of small businesses said the U.S. economy is on the wrong track -- there are signs of optimism.

Nearly half of employers said believe their local economy is on the right track, and three out of four small businesses believe their establishment is headed in the right direction.

Firms with fewer than 500 workers and annual revenue of less than $25 million were surveyed for the second-quarter U.S. Chamber of Commerce Small Business Outlook Survey.

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adolfo.flores@latimes.com

Follow Adolfo Flores on Twitter.

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