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Forever 21 Cuts Employee Hours and Health Benefits
Forever 21 is an American chain of clothing retailers with branches in the Americas, Europe, Asia and the Middle East. Recently the clothing retailer recently cut its employees hours. As most jobs only offer health benefits to full time employees, it follows that its part-time employees won’t be receiving health benefits. Moving along with the times, the company had an internal memo leaked, which discussed the transition it is making to its personnel, from full time onwards to part time. Carla Macias, associate director of human recourses at Forever 21 commented, “company-wide, Forever 21 recently audited its staffing levels, staffing needs, and payroll in conjunction with reviewing its overall spending budget.” She goes on to say that ultimately the company is currently reducing its full-time non-management staff.
In a statement on Facebook, the company did mention that less than 1% percent all U.S. stores would be affected. The positions that would take the reductions in hours would be stock associates, sales associates, store maintenance associates, accessory specialists and cashiers. When business picks up, things will change for the better. Retailers have peak and off peak periods where they hire more or less, and these are normal cycles- especially for this industry. This does not spell doom, and if anything, the company is becoming more flexible and that is a good thing that means it is changing with the times.
Employees will work a maximum of 29.5 hours a week, while federal regulations will not allow more than 40 hours without overtime. It is possible that many of the staff were working in between 30 and 40 hours, so this reduction, while possibly being problematic in some regards to employees, definitely does not intend to devastate anyone.
Critics see the policy as a way to offload healthcare expenses, as cutting benefits does save the company a critical amount of money. One critic commented, “Your first priority should be the people that work to bring you your profit, not lining the pockets of your executives. Shame on you for being yet another company to leech off of the American people.”
The clothing retailer pushed back and commented, “Forever 21, like all retailers, staffs its stores based on projected store sales, completely independent of the Affordable Care Act,” according to the Huffington Post.
The private company had income of $3.4 billion in 2012. They are experiencing 30 percent revenue growth as of 2012. BoA analysts lauded Forever 21 as “the most transformative retail concept,” according to the Huffington Post.