On Obamacare and Restaurants

by Matthew Stollak on Thursday, January 10, 2013

Hey restaurants owners.

We get you're unhappy about some of the regulations in Obamacare that require you to provide basic health care to your employees who work over 30 hours a week.

How about you Taco Bell?
Johnna Davis has worked at the Taco Bell in Guthrie since September. She's seen a 200 dollar cut in her paycheck since a new store policy went into effect.
"What we were being told was one thing, and that was, ‘we're going to offer benefits, we'll just keep all of our full time employees and then come December, their whole story changed," Johnna Davis said.
She says her manager held a meeting before Christmas, saying employees' hours would be cut in the new year.
"They informed everybody that nobody was considered full-time any longer, that everybody was now considered part-time, and [they] would be cutting hours back to 28 hours or less due to Obamacare," Davis said.
Under the Affordable Care Act, companies are required to provide insurance to its full-time employees, or face fines. Davis would've qualified for an insurance plan.
What about you, Wendy's?

A fast-food chain is slashing employee hours so franchise owners don't have to pay health benefits. Around 100 local Wendy’s workers have learned their hours are being cut. A spokesperson says a new health care law is to blame.
“Thirty-six to 37 hours a week.” That's how many hours T.J. Growbeck works at the 84th and Giles Wendy's restaurant. The money he earns helps him pay for the basics, but that’s not the case for all his co-workers. “There are some people doing it trying to get by.”
The company has announced that all non-management positions will have their hours reduced to 28 a week. Gary Burdette, Vice President of Operations for the local franchise, says 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.
A Denny's franchise owner threatened to put a 5% Obamacare surcharge on the menu, noting customers can take it out of the waitstaff tip

An Applebee's franchise owner threatened a hiring and building freeze. 

Papa John's CEO John Schnatter threatened that he has to raise the price of pizza $.14 to cover the costs (even though the company can afford to give away 2 million pizzas and the actual cost would be no more than $.10 a pie to provide health care to his employees).

Here's the thing...

1.  Costs go up all the time for restaurants, particularly when it comes to changes in the cost of ingredients to make the meals.  Just ask Buffalo Wild Wings, who've had to raise the cost of their chicken wings to offset the soaring price of chicken.  We as consumers are not happy about it...but we understand, particularly if you are transparent about the cost increase.

2.  When I, and other consumers, go to restaurants, not only do we hope for a delicious meal, we also hope that we don't get sick from it.   When 90% of employees in the food service industry are not provided sick leave, and you are now making it known that you are cutting hours to avoid providing health insurance to your employees, it lowers my confidence in the quality and care of what you are offering.  

If employees do not have health insurance, they are also not seeking health care when ill, and, with reduced hours, they are coming to work and handling the food that we all eat.

So, enjoy that pizza from Papa John's during the Super Bowl.  Just remember, you don't know who's been touching the cheese and whether they are healthy or not.


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