Now joining the ranks of restaurant franchises around the country one Wendy’s franchise from Omaha, Nebraska says they are going to cut all their employees back to part-time positions to avoid providing them with healthcare under the Affordable Care Act, AKA Obamacare.
Owners of restaurant chains ranging from Olive Garden to Red Lobster have announced similar moves and have recently announced that their anti-Obamacare campaigns have hurt much more than helped their businesses.
By moving employees to part time positions they are eligible to receive their health care benefits fromt he government as opposed to getting them from their employer. The employer has to pay a fine if their employees get their coverage from the government but only if they are full time workers.
Gary Burdette, vice president of operations for the local franchise said:
“The company has announced that all non-management positions will have their hours reduced to 28 a week. The cuts are coming because the new Affordable Health Care Act requires employers to offer health insurance to employees working 32-38 hours a week. Under the current law they are not considered full time and that as a small business owner, he can’t afford to stay in operation and pay for everyone’s health insurance.”
This fall Denny’s saw some of their franchisees announce similar moves and the parent corporation distanced themselves from the policy. Darden Restaurants saw a sharp 37 percent drop in profit after threatening to cut workers to part-time.
The owner of Papa John’s pizza, John Schnatter, said that he will have to raise prices in order to compensate for the new health care requirements. Schnatter took considerable criticism when he announced that the price increases would amount to a few pennies per pie. The American Urban Institute recently published a study showing that the Affordable Care Act has a negligible impact on costs for large corporations and that small businesses actually see a benefit.
The restaurant industry has been the most outspoken in its warnings of skyrocketing costs due to the health care mandate of Obamacare.
Do you think the requirements from the Affordable Care Act are going to negatively effect small businesses?