Forever 21 caught in Obamacare controversy
The clothing chain says cutting its workers' hours isn't tied to the new law, but that's not stopping critics and supporters from weighing in.
By Aimee Picchi
If you like your cropped T-shirts to come with a dose of Obamacare controversy, look no further than retailer Forever 21.
The apparel seller is the latest business to find itself embroiled in an Obamacare minefield, with consumers accusing the chain of slashing worker hours as a way to avoid paying benefits under the new health care insurance law.
But Forever 21 is denying its decision to cut hours is related to the overhaul, writing on Facebook that the cutbacks are "based on projected store sales, completely independent of the Affordable Care Act." Obamacare will go into effect in 2014, although the government has delayed the mandate that employers provide coverage to full-time employees until 2015.
For Forever 21, the furor started after the company said it would cut hours of some full-time employees to a maximum of 29.5 hours a week, just under the 30-hour week that qualifies workers as full-time under Obamacare, The Huffington Post notes. It's not clear how many of the chain's 30,000 employees that move will affect, although Forever 21 said it was "less than 1%."
Some consumers weren't convinced by the denial.
"Expected sales says everyone should go to 29.5 hours? I guess we will all pick up the tab for their healthcare (emergency rooms) and their food (food stamps)," one consumer wrote on Forever 21's Facebook page.
Cuts to employee hours would suggest that some stores are seeing slower sales, although Forever 21 is a private company and doesn't disclose its results. But the company has experienced astounding growth during the past few years. In a September interview with CNN, founder Do Won Chang said his company was on track to report $4 billion in 2012 sales. Sales were $2.3 billion in 2009, according to The Wall Street Journal.
While some customers voiced displeasure and vowed to stop shopping at the chain, others offered support, and some pointed fingers at the health care overhaul.
"Forever 21, don't listen to these people," one supporter wrote. "They're completely ignorant of how to run a business."
The chain, which prints a Bible verse on the bottom of its shopping bags, is just the latest retailer to cut worker hours ahead of the ACA's implementation. Regal Entertainment Group (RGC +0.38%) saw a similar customer backlash in April after it announced it was cutting hours to avoid providing coverage under the law.
Still, there's not much statistical evidence that companies are planning cutbacks in response to the ACA, although anecdotes abound. Franchisees for companies such as Subway and other fast-food companies are also planning to reduce hours, NBC News reported earlier this month.
Loren Goodridge, who owns 21 Subway franchises, told NBC News, "To tell somebody that you've got to decrease their hours because of a law passed in Washington is very frustrating to me. I know the impact I'm having on some of my employees."
But Forever 21 is denying its decision to cut hours is related to the overhaul, writing on Facebook that the cutbacks are "based on projected store sales, completely independent of the Affordable Care Act." Obamacare will go into effect in 2014, although the government has delayed the mandate that employers provide coverage to full-time employees until 2015.
For Forever 21, the furor started after the company said it would cut hours of some full-time employees to a maximum of 29.5 hours a week, just under the 30-hour week that qualifies workers as full-time under Obamacare, The Huffington Post notes. It's not clear how many of the chain's 30,000 employees that move will affect, although Forever 21 said it was "less than 1%."
Some consumers weren't convinced by the denial.
"Expected sales says everyone should go to 29.5 hours? I guess we will all pick up the tab for their healthcare (emergency rooms) and their food (food stamps)," one consumer wrote on Forever 21's Facebook page.
Cuts to employee hours would suggest that some stores are seeing slower sales, although Forever 21 is a private company and doesn't disclose its results. But the company has experienced astounding growth during the past few years. In a September interview with CNN, founder Do Won Chang said his company was on track to report $4 billion in 2012 sales. Sales were $2.3 billion in 2009, according to The Wall Street Journal.
While some customers voiced displeasure and vowed to stop shopping at the chain, others offered support, and some pointed fingers at the health care overhaul.
"Forever 21, don't listen to these people," one supporter wrote. "They're completely ignorant of how to run a business."
The chain, which prints a Bible verse on the bottom of its shopping bags, is just the latest retailer to cut worker hours ahead of the ACA's implementation. Regal Entertainment Group (RGC +0.38%) saw a similar customer backlash in April after it announced it was cutting hours to avoid providing coverage under the law.
Still, there's not much statistical evidence that companies are planning cutbacks in response to the ACA, although anecdotes abound. Franchisees for companies such as Subway and other fast-food companies are also planning to reduce hours, NBC News reported earlier this month.
Loren Goodridge, who owns 21 Subway franchises, told NBC News, "To tell somebody that you've got to decrease their hours because of a law passed in Washington is very frustrating to me. I know the impact I'm having on some of my employees."
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