FOR IMMEDIATE RELEASE
Contact:
Alisa Harrison, 202-628-8000
Matthew Haller, 202-662-0770
aharrison@franchise.org
mhaller@franchise.org
@franchising411
IFA CALLS FOR REPEAL OF JOB-KILLING EMPLOYER MANDATE
WASHINGTON, March 29,2012 – The International Franchise Association called on Congress to repeal the employer mandate provision in the health care law, saying the mandate would eliminate existing jobs and business expansion, while also disincentivizing new business formation at a time when the franchise industry is poised for modest growth in 2012.
“The health care law’s employer mandate provision is casting a dark shadow with potentially grave consequences over many franchise business owners, creating additional uncertainty about expanding their operations or hiring new workers,” said IFA Senior Vice President of Government Relations & Public Policy Judith Thorman. “The mandate will force franchise small business owners to choose between reducing the number of full-time employees, downsizing their businesses or both, none of which is a prescription for economic recovery.”
The House Ways & Means Health Care Subcommittee held a hearing today examining the mandate’s impact on job creation, which focused on a 2011 study by the Hudson Institute for IFA that showed 3.2 million jobs and tens of thousands of franchise businesses would be put at risk by the employer mandate. The study’s author, Diana Furchtgott-Roth, testified at the hearing about the mandate’s impact on job creation, new establishment formation, impact on lower wage and entry-level employees.
According to Furchtgott-Roth’s testimony, “The combination of penalties gives businesses a powerful incentive to downsize, replace full-time employees with part-timers, and contract out work to other firms or individuals. The franchise industry will be particularly hard-hit because the new law will make it harder for small businesses with 50 or more employees to compete with those with fewer than 50 employees. Industries that have traditionally offered the greatest opportunities to entry-level workers — leisure and hospitality, hotels/restaurants — will be particularly hard-hit by the new law. Many of these employers do not now offer health insurance to all of their employees, and employ large percentages of entry-level workers, whose cost of hiring will increase significantly.”
IFA, as part of the Council for Affordable Health Coverage (CAHC), is among a number of business groups supporting the American Job Protection Act.(H.R. 1744) sponsored by Rep. Charles Boustany (R-La.) The bi-partisan legislation has more than 208 co-sponsors. CAHC sent a letter of support to Rep. Boustany to call on Congress to act on the bill soon.
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About the International Franchise Association
The International Franchise Association is the world’s oldest and largest organization representing franchising worldwide. Celebrating over 50 years of excellence, education and advocacy, IFA works through its government relations and public policy, media relations and educational programs to protect, enhance and promote franchising. Through its media awareness campaign highlighting the theme, Franchising: Building Local Businesses, One Opportunity at a Time, IFA promotes the economic impact of the more than 825,000 franchise establishments, which support nearly 18 million jobs and $2.1 trillion of economic output for the U.S. economy. IFA members include franchise companies in over 300 different business format categories, individual franchisees and companies that support the industry in marketing, law and business development.