A Business Owner’s Response To Obamacare

What a great time to load more burdens on business.  Just as the US economy has leveled off from its scary decline, the federal government has chosen to add regulations and taxes relating to health care insurance to the choice of whether to hire or keep an employee.

I suggest that now is the perfect time to deal with this extra cost head-on with a new concept of employment compensation:  Total Compensation Agreements.  That’s right, fire all your employees and rehire them under TCA’s.  A Total Compensation Agreement would put a number on the total amount the employer will pay for the services of an employee.  If the number is $75,000, then that amount would be allocated among the employer’s costs related to the employee; what was left would be their paycheck.

We are fortunate to live in the age of computers that can calculate how this would work out.  For example, if the employee’s health insurance is $25,000 for a family of 4, the program would subtract that amount from the $75,000 leaving $50,000; if the employer’s cost of  FICA, unemployment insurance, worker’s compensation, etc., was $5,000, that would be subtracted from the $50,000 leaving $45,000; if the employee’s withholding and FICA was $7,500, that would leave take home pay of $37,500.  That is it.

If the business cannot afford to pay more than $75,000 for this employee’s services, or the employee cannot afford to live on $37,500, then no job.

The TCA structure would eliminate all minimum wage employees, and almost all less skilled workers from consideration.  Only those people whose productivity and lifestyle matched the profile would be employed.  Already, many business have found that redesigning their business model to use technology and fewer people makes sense.

What else can a business owner do?  It is either this approach or failure as a business.  Do the numbers.

So far, the only thing a business owner does not have to do is stay in business.