ACA ruling: You can now get sued for reducing employees’ hours

by Christian Schappel

This U.S. district court ruling is a real game-changer for employers — and not in a good way. Turns out, you CAN now be sued for simply reducing an employee’s hours. 

Here’s the deal: If an employee can show that your intent in reducing his or her hours was to deny the person access to some benefit or right he or she would’ve otherwise been entitled to, you can be sued.

That’s according to a new ruling by the U.S. District Court for the Southern District of New York.

This ruling has major ACA implications.

Example: If you reduce employees’ hours below 30 per week to avoid having to offer them health insurance per the ACA — and employees provide any evidence that your intention behind the hour reduction was to avoid having to offer insurance — bang … lawsuit.

The court just ruled Dave & Buster’s employees can sue the restaurant chain for that very reason.

Protected by ERISA

The employees sued under ERISA Section 510.

Yes, ERISA was written primarily to apply to retirement plans. But Section 510 can be applied to a number of benefit plans as well — including healthcare coverage.

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