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More Part-Time Jobs Ahead Under Obamacare: Critics

Friday, 3 May 2013 | 12:27 PM ET
Full-time and part-time openings at the Thai Kitchen restaurant in Silver Spring that pay the minimum wage.
Michael Williamson | The Washington Post | Getty Images
Full-time and part-time openings at the Thai Kitchen restaurant in Silver Spring that pay the minimum wage.

As Wall Street cheered Friday's job report, critics of President Barack Obama's health care overhaul stood laser focused on one number—part-time workers.

In April, those employed part-time for economic reasons increased by 278,000 to 7.9 million, largely offsetting a decrease in March. Obama's detractors are convinced that number will only increase dramatically in the coming months as employers look to split jobs.

Starting next year, employers with more than 50 full-time employees will be subject to the so-called employer mandate in the Affordable Care Act, which basically says they must provide health care for their full-time employees or pay a fine.

"Because employers with fewer than 50 employees or full-time equivalent employees will not be subject to the possibility of this fine," said Daniel Schwarcz, an associate professor at the University of Minnesota Law School who specializes in insurance law, "some employers may be inclined to keep their number of employees below 50."

Job splitting would essentially create two jobs out of one so that the employee is no longer considered "full-time."

(Read More: For Small Businesses, Learning Obamacare Math)

In terms of the impact this would have on the unemployment report, Thomas McElroy, the human capital leader for Deloitte's retail and distribution practice, said: "Because of the way the federal government defines and reports on unemployment, if the total number of people with jobs goes up within the working population, unemployment numbers improve. The move from a smaller number of full-time workers to a greater number of part-time workers would therefore create a lower unemployment number.

"When we look at retailers and other service providers that employ large numbers of people, this impact could be significant," McElroy added.

So the perception would arise of an improving job market, but clearly with major caveats if more and more businesses start splitting jobs.

That rise in part-time workers could grow significantly in low wage, high employment industries like the restaurant business under Obamacare, say detractors.

The Bureau of Labor Statistics said employment in the food services rose by 38,000 in April while retail trade employment increased by 29,000 during the month. The industry added an average of 21,000 jobs per month over the past year.

Indeed, Deloitte's McElroy said he is seeing an influx of part-time jobs that restrict hours to 28 per week.

(Read More: Gartman: 'Obamacare' Stunting Job Growth)

Still, there are some who stand to benefit from job splitting.

Recent college graduates, who have the option to stay on their parents' health insurance until they are 26, could jump at the opportunity to get a permanent part -time job that someone more experienced may pass over because of the lack of health-care coverage.

By CNBC's Dina Gusovsky

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