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Forever 21 Under Fire for Cutting Employee Hours, Health Insurance

Oliver Morris/Getty Images(NEW YORK) -- Forever 21 is experiencing some adverse reactions through social media after telling its employees in a letter that the clothing retailer would be cutting hours for some full-time employees to avoid any obligation to provide health plans for them under the Affordable Care Act.

Critics are reacting to the employee memo that was reportedly leaked online.  The document informed employees that it would cut "a number of full-time non-managment positions," including "full-time Stock Associates, Store Maintenance Associates, Accessory Specialists and Cashiers."  According to the letter, these employees, having been demoted to part-time, would be limited to working no more than 29.5 hours.

The Affordable Care Act requires employers with at least 50 employees in the company to provide coverage for those who work 30 or more hours each week.

The employee memo, posted last week on Facebook, also told employees that, as of Aug. 31, Forever 21 will no longer provide medical, dental, vision or other voluntary plan coverage, and that the former full-time workers will not accrue paid time off.

Critics have flocked to the company's Facebook page in the last week with comments scolding them for shifting its full-time employees to part-time.  According to MarketWatch, Forever 21 has responded to the backlash saying that less than 1 percent of its U.S. employees will be impacted by the shift.  It also denied making the decision based on the controversial health care law.

Copyright 2013 ABC New Radio

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