Great strategy...you used variables X and Y - thereby making the message impossible to decode by all the press and Obama voters (same thing, I know).
Could you start a second company with new employees and have your first company contract services from your second company?
Doesn’t work that way. IRS has specific prior case law from businesses which already tried this, and lost to the IRS , to back up the IRS in auditing/prosecuting you.
You didn’t reinvent the wheel.
Under Obamacare all business you own will be counted together, even if they are not related. That way people can’t avoid the 50 employee threshold by merely starting smaller companies.
You are looking for avoidance, which is legal, not evasion, which is not, and that can be a pretty fine line, so you’re almost going to have to get the advice of a tax attorney, to plot strategy.
I think some did say this but I think they will eventually catch on. Still, I like your thinking. Myself, I’m only working part-time, eventually I’d like to go to full-time but with Bammycare, I don’t know. In a way, I’m glad to be part-time now, the money is a bit tight, very tight but I need the time right now to care for Mom who is fighting breast cancer and once she gets a bit better, I’ll ask for more hours. I’m 47 myself, like you. I had a good paying, full-time job but the assignment ended just prior to my mother’s diagnosis, if I was in your area, I’d consider the 20/25 hours. I think I’ll be there soon after Mom is a little better where I’m working at. I also do webpages as well, freelancing from time to time, I’d like to work from home eventually. If Bammy keeps up, we will need to create our own jobs.
I would think that a better strategy would be to create a third company as a contracting agency. Then employees could be 1099 contractors. Just thinking out loud.
The answer is simple for all concerned.
Just ask John Galt.
I’ve worked as a contractor for TRS inc. (www.gotrsinc.com)
They’ve handled everything from hourly workers to $150/hour professionals. Long term “contracts” have gone on for years. I put it in quotes because if the employer stops paying then the contractor is gone overnight.
They simply plan on paying the penalty for not offering insurance.
This is a great strategy. For “low” skill workers (gas station, grocery store, etc.) it might work if you can get along with your competitors on the matter.
Here is something else I have been thinking about. Businesses could make all their “employees” (or most or part) “contractors”. This would require each of them to set up their own LLC. But they would be able to pay their employees a lot more as they wouldn’t have to do as much for taxes, SS, Mediare, workman’s comp, etc. The employee would be responsible for all of that. But by my calcs, in industry I am familiar with, this looks like about a 70% pay increase with savings to the company being trasferred to employee.
I believe it is legal. I recently read about franchisees of fast food restaurants who are doing just this. One person owns one franchise for Hamburger, Inc. in one neighborhood, and another person owns the franchise for Hamburger, Inc. in the neighborhood down the road. They agree to hire the same person on a part-time basis, and coordinate hours. That way, the worker gets to work more hours, but each employer keeps them below 30 hours and avoids ObamaCare.
Whatever you do don’t tell the employees your strategy. Obamacare has a whistleblower clause. If you have an Obot in the know on staff they can inform the government and be granted iron clad status. You cannot demote, fire, cut hours, pay, etc for that employee. Not only are you busted, you are stuck with the rat forever.
I’d open a third Company A, fourth Company B and fifth Company C as necessary. Hire 29 hour (or full time) contract workers at Companies A, B and C who bill by the hour to your 49 employee Company X and your neighbor’s Company Y.
Each company (A,B,C,X,Y) stays under 50 employees. You can work folks either full shifts or 29 hour shifts as necessary.
Just make them separate, shell companies with contract workers. You can make it look legitimate enough. There are lots (and there will be even more) contracting companies. You can even start these for others.
I smell a business opportunity.
Open a staffing company.
Hire 49 people.
Allow them to work 29 hours maximum each.
Bill local companies.
Sit back and watch the cash flow through, take a cut for billing the services.
How hard can that be?
If I own an ice cream shop and the guy across the street owns a sandwich shop, can we agree to share the same workers @ 20 hours each, so the two independent businesses stay under the limit while the workers get guaranteed 40 hour work weeks?
Make it a dry cleaners and a liquor store. Any two unrelated mom-and-pop businesses that only have proximity in common.
-PJ
Absolutely legal and a good way to subvert the tyranny.
if she’s going to switch some to 40 hours a week, that should make scheduling easier, as these people will be taking 15 extra hours a week.
further if there is no federal exchanges set up inthe state she’s in, that means no federal subsidies to these people to pay healthcare costs, which are skyrocketing as planned. if the costs of coverage are more than 8% of these peoples wages they are exempt from the individual mandate and the employer is exempt from the penalty for that employee not being covered by the business. and they will be more than 8% of the person’s wages so it works out.
Obama is five steps ahead of you.
He has the IRS out there investigating companies with common ownership ties. If they find you employing a strategy like this, fines and penalties will be forthcoming.
They will treat all enterprises as being one company.
Hire 200 workers in India and import their work view the internet. Doesn’t matter if it is tax returns, legal document generation, graphic design, computer programming, software testing, etc.
Problem of avoiding Federal requirements for insurance solved.
If India tries to push off those kinds of costs on you, hire contractors from India and let that contracting firm pick up the costs!