I actually feel sorry for the regular Huffington Post/AOL employees who will get hit by this. I am utterly unsurprised that it happened, but I can feel bad for the regular employees while noting that we knew that this was going to happen:
“Obamacare is an additional $7.1 million expense for us as a company, so we have to decide whether or not to pass that expense to employees or whether to cut other benefits,” AOL’s Chairman and CEO Tim Armstrong told CNBC Thursday morning. AOL is the parent company of The Huffington Post.
Beginning Jan. 1, AOL stopped depositing matching funds into employee 401(k) accounts each pay period. The company will now make one yearly lump-sum deposit of those matching funds into retirement accounts, at the beginning of each year.
Previously, AOL matched the funds each pay period: doing it this way means that the company essentially has set up an annual checkpoint system. Didn’t make it to the next checkpoint (i.e., quit or get fired before January)? Lose all potential matching funds that accumulated since the last checkpoint. Not a great way to do it for your employees, but as Armstrong said: AOL is now $7.1 million in the hole from Obamacare. Money’s going thus be, oh… $7.1 million dollars tighter, and it’s got to come from somewhere. TANSTAAFL, don’t you know.
No, I won’t translate that acronym. My readers know it already and everybody else has no excuse not to.
Moe Lane
PS: Via David Freddoso on Twitter, who has this interesting point to make:
Interesting that AOL figured out a way to pay for Obamacare that reduces benefits and also increases job lock.
— David Freddoso (@freddoso) February 6, 2014
In light of that, I do recommend that HuffPo thus not push the job lock thing too strongly. It will sound kind of ridiculous, coming from a media organization whose own parent company is busily disproving the assertion.
TANSTAAFL. That is all.
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Mew
They aren’t the only company to do this.
http://money.cnn.com/2012/11/16/pf/expert/401k-match.moneymag/
Is “job lock” the new economic buzzphrase? What’s it mean?
“job lock” is “wage slave” for the next generation.
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From Wikipedia: The term job lock is used to describe the inability of an employee to freely leave a job because doing so will result in the loss of employee benefits (usually health or retirement related). In a broader sense, job lock may describe the situation where an employee is being paid higher than scale or has accumulated significant benefits, so that changing jobs is not a realistic option as it would result in significantly lower pay, less vacation time, etc.
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(http://en.wikipedia.org/wiki/Job_lock)
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Mew
I’m sure it will shock nobody to realize that page was just created a week ago.
As you are fond of saying, entropy eventually wins all bets. It is honestly hard to feel sympathy for a group of people who is now suffering the unintended consequences of a policy they pushed on the rust of us.