A major deadline for the Affordable Care Act (ACA), the healthcare reform law also known as Obamacare, is coming up quickly.  If a recruiter has even one employee, they will likely have to comply.

The ACA requires employers to provide employees with a notice about coverage options available through the Marketplace, which was created by the ACA to provide an online “one-stop shop” for individuals to compare private health insurance options.

Starting on October 1, employers must provide the notice to new employees.  In addition, it must be distributed to all existing employees by October 1.  The notice must inform employees of the following:

• The Marketplace will be available starting January 1, 2014.
• What services the Marketplace will provide and how to contact it.
• They may be eligible for premium tax credits if their employer doesn’t offer an plan that provides “minimum value” and that is “affordable,” as defined by the ACA.
• They may lose their employer’s healthcare contribution (if applicable) if they choose to purchase insurance through the Marketplace.

You can find more details about the requirements under this provision.

A common misconception about Obamacare is that employers only have to worry about it if they have 50 or more employees.  This stems from the law’s employer mandate, which will require employers with 50 or more employee to provide healthcare starting in 2015.  But even the smallest employers, including recruiting firms that have any in-house employees or contractors on their payroll, have responsibilities under the ACA.

This required notice is perhaps the best example.  The ACA actually created this provision as an amendment to the Fair Labor Standards Act (FLSA).  So if you are subject to the FLSA, as almost every employer is, you must comply with this provision regardless of whether you offer insurance to employees.  If you are not sure if the FLSA applies to you, you can find out by visiting this page on the Department of Labor website.

Fortunately, you don’t have to write this notice from scratch.  The Department of Labor provides Model Notices for employers who offer a healthcare plan and employers who do not offer a healthcare plan.

Regardless of your firm’s size, it’s important that you stay on top of the developments surrounding the healthcare reform law.  Not only could there be implications for you as an employer, but your clients could also look to you for answers to their staffing issues that may arise as a result of Obamacare.

As the biotechnology industry grows, interest in contract staffing among both companies and workers in this area is also increasing, creating a hot new niche for contract staffing recruiters.

Biotechnology professionals are those who are involved in the use of living organisms to create certain products, such as engineered crops and pharmaceutical drugs.  These include a wide range of analysts, scientists, engineers, technicians, and specific titles such as biomedical engineer, medical scientist, biochemist, and more.  According to the Bureau of Labor Statistics, employment in this area is expected to increase by 31% between 2010 and 2020.

Due to the nature of the work and the unique characteristics of the industry, some recruiters are noticing that a lot of that hiring is happening in contract staffing, so they’ve started to offer contractors to biotech companies.  One of these recruiters is Jim Davidson of Human Capital Resource, LLC.  Davidson’s firm has provided biotech and pharmaceutical companies with direct hire candidates since 2005, but just recently started to provide contract staffing to meet his clients’ need for cost savings and flexibility.

“Many companies in this niche are older companies with very rich benefits packages,” he said.  “It costs them a tremendous amount of money to hire on a full-time basis.  Not only that, but they could be working on a $7 billion drug that could end up being a bust or approval could be delayed, in which case they would have to scale back.”

When these companies do have to hire on a full-time or direct hire basis, they tend to be very selective.  As a result, Davidson is also noticing a growing demand for contract-to-direct services, which his firm can now provide.  Contract-to-direct arrangements, often referred to as temp-to-hire, allow clients to try a candidate before they make a direct-hire commitment.

Recruiter Raymond Gooch has noticed a similar trend.  Gooch and his firm, Spectrum Career, LLC, recently provided job search skills training to college students who received grants funded by the American Recovery and Reinvestment Act for workforce development in bioscience.

“Even though the individuals participating in the bioscience training often had transferable skills, they usually had no experience in the industry,” Gooch said.  “Hiring temps/contractors gives the employer an opportunity to evaluate the worker prior to making a long-term commitment.”

It is also an attractive option for many biotechnology professionals.  According to the recent Randstad Pharma Engagement Study, the most important factor that drives the engagement of pharmaceutical/biotech professionals is flexibility.  Contract staffing provides the ultimate in flexibility, often allowing workers to take on project-based assignments with flexible schedules.  They also have the opportunity to take time off between assignments. This is particularly popular with older workers, Davidson said.

“Those in the later stages of their careers enjoy it,” he said. “There is a lot of flexibility. They don’t have the same financial pressures as younger workers, so contracting becomes more attractive later in their careers.”

Davidson feels the sweet spot for recruiters wanting to place contractors in the biotech niche is smaller companies.

“A lot of the larger companies are very well organized when it comes to contract staffing and have vendor managers involved in the process,” he said. “It becomes very difficult.”

As the products produced by biotech companies become more and more important, we’ll be keeping an eye on this hot contract staffing niche!

Employers all across America took a collective sigh of relief last week when the Obama administration announced that the employer mandate portion of the Affordable Care Act (ACA) would be postponed until 2015.  But the decision could leave some recruiters wondering how this will affect their firms, many of which stood to benefit from the mandate.

The employer mandate was to require employers with 50 or more employees to provide healthcare insurance to those employees by January 1, 2014, and it also came with a number of reporting requirements.  This mandate was a mixed blessing for recruiters.

For larger recruiting firms, it presented a challenge, as they were at risk of rising above the 50-employee threshold and having to provide insurance to their contractors.  But for most recruiters, it provided an opportunity to get more contract staffing business, as more companies turned to contractors to stay below the 50-employee threshold.

But now, according to a blog on the U.S. Department of Treasury website by Assistant Secretary for Tax Policy Mark Mazur, the reporting requirements under the employer mandate have been postponed until 2015.  That means the government will not be able to determine which employers are not providing the required coverage and cannot assess penalties, so the requirement to provide insurance is effectively also postponed until 2015.

So where does this leave recruiters?  Well, if you are a large firm that would fall under the employer mandate, you technically don’t have to provide insurance until 2015.  However, Mazur urged employers to voluntarily implement the reporting requirements in 2014 to prepare themselves for 2015.  Also, the delay does not relieve you of the obligation to notify employees about the existence of healthcare exchanges, or “The Marketplace.”  You must still provide the required notice by October 1, 2013.

For recruiters who are not subject to the employer mandate, but were hoping to benefit from it, stay the course.  You should still discuss the healthcare reform law with clients and the eventual impact it will have on their costs and administrative burden.

There is no indication at this time that the employer mandate will be repealed, so they can’t lose anything by preparing now.  In fact, they can immediately start reaping the other benefits of contract staffing: workforce flexibility, reduced legal liability, the ability to “try-before-they-buy” through contract-to-direct arrangements, etc.

The bottom line is that ALL recruiters should stay on top of this law and the impact it could have on their clients.  Companies often look to recruiters as employment experts and may turn to you for advice on how to best navigate the law.

(Editor’s note: This article is for informational purposes only and should NOT be considered legal advice.)

The Affordable Care Act (ACA), the healthcare reform law often referred to as Obamacare, is being credited for a spike in contract staffing, which is at its highest level since 2006 and is outpacing traditional, direct hiring.

The Bureau of Labor statistics reported that 2,679,800 workers were employed in contract/temporary positions in May, inching ever closer to the all-time record of 2,767,300 contractors working in October 2006, according to ere.net.

Moreover, year-over-year contract staffing growth was 7.5%, which is five times the growth of the overall economy’s jobs increase of just 1.56%.  The contractor penetration rate (the percent of workers who are contractors) has hit 1.98%, close to all-time high of 2.03%.

Investors Business Daily is pinning some of this contract staffing growth on what are being called ‘Obamacare-Dodgers’ — employers trying to get around the employer mandate portion of the ACA by utilizing contractors instead of direct hires.  The employer mandate, which begins in 2015, will require employers with 50 or more employees to provide healthcare insurance to their employees or pay a per-employee penalty.

Utilizing contractors who are W-2 employees of a contract staffing back-office is a legitimate strategy for reducing or eliminating an employer’s responsibilities under the employer mandate.  Basically, companies are outsourcing the employer responsibilities to the back-office.

Recruiter Joell Iskander of Select Hire Resource is seeing more of her clients go the contract staffing route as a result of Obamacare.

“When clients utilize contractors, benefits and other employer issues are no longer their problem,” Iskander said.  “If they put someone on as a contractor, it’s something the recruiting firm or back-office handles.”

This is a safer alternative to another popular Obamacare avoidance strategy — classifying workers as 1099 Independent Contractors.  Companies may use this technique to reduce their number of employees that must be counted to determine if they fall under the employer mandate.  However, simply calling a worker an independent contractor doesn’t make it so.

They must meet the IRS guidelines for independent contractors.  The Obama administration has been very diligent in targeting companies that misclassify W-2 employees as 1099 independent contractors because the proper employer taxes are not being paid on those individuals.  This is not an issue when companies utilize contractors employed through a back-office because that back-office classifies the workers as W-2 employees, pays the employer share of payroll taxes, and takes responsibility for Obamacare compliance.

The continued growth of contract staffing in light of Obamacare presents a huge opportunity for recruiters willing to place W-2 contractors.  Unfortunately, some recruiters will pass up this opportunity because they are reluctant to delve into contract staffing due to the misconception that it is more difficult than direct hire.

But contract staffing does not have to be any more difficult than direct hire placements when you utilize a contract staffing back-office.  The back-office becomes the legal W-2 employer of the contractors and handles all of the financial, administrative, and legal details of the contract placement.  This leaves you to handle the traditional recruitment tasks: get the job order, find the candidate, and negotiate the rates.

Additional placements are yours for the taking IF you are willing to stretch a little outside of your comfort zone.  Not only can you increase your sales, but you can also become a valuable partner by providing clients with a viable solution to one of the most challenging staffing issues they’re facing.

(Editor’s note: this article is for informational purposes only and should NOT be considered legal advice.)

Think you don’t have to worry about healthcare reform because you don’t have 50 or more employees? Think again!

Most of the hype about the Affordable Care Act (ACA), the healthcare reform law better known as Obamacare, has been surrounding the employer mandate.  Employers with 50 or more employees will have to provide affordable health coverage to those employees by 2014.

If you have contractors who are on your payroll, they count towards your total employee count.  Many recruiters, even those who employ some contractors, won’t get anywhere near this 50-employee threshold.  But that doesn’t mean they are out of the woods when it comes to Obamacare.

There are administrative tasks tied to the ACA, even for the smallest of employers.  For example, even if you only have a couple of employees (in-house, contractors, or a combination), you will have to provide those employees with a notice about the healthcare exchange, which has now been dubbed “The Marketplace.”

The Marketplace is supposed to provide individuals with a place where they can compare and select healthcare plans.  Depending upon their income, they may qualify for premium tax credits to reduce the cost of the coverage they select.

Any employer who is subject to the Fair Labor Standards Act (FLSA), which is almost EVERY employer, must provide a notice to employees letting them know that the Marketplace will be available starting January 1, 2014.

The notice must let them know what services the Marketplace provides and how to contact it.  It must also inform them that they may be eligible for a premium tax credit and that they may lose the employer contribution (if applicable) if they choose to purchase their insurance through the Marketplace.  You have to provide this notice even if you do not offer insurance.

On October 1, 2013, employers must begin providing this notice to new employees at the time they are hired.  All existing employees must receive the notice by October 1, 2013.  For details on how to implement this, the Department of Labor has provided a Technical Release.

Very small firms and companies may have other responsibilities under Obamacare, as well, especially if they offer health insurance.  For instance, the health reform law mandates some changes to the COBRA notices employers send to plan participants who lose their coverage.  The law also has certain reporting requirements for employers who offer health insurance, regardless of how many people they employ.

For these reasons alone, it’s important that recruiters don’t ignore Obamacare.  Be sure that you are aware of your responsibilities based on the number of employees you have, and make sure you educate your smaller clients about these provisions, as well.

Editor’s note: This article is for informational purposes only and should NOT be considered legal advice.

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