Obamacare may force White Castle to seek part-timers

The maker of onion-steamed mini-burgers says it won't cut current hours or benefits, but can't afford to cover newcomers.

By Jason Notte Jul 25, 2013 3:31PM
A White Castle restaurant in Columbus, Ohio (© Jay LaPrete/AP Photo)If the burgers are smaller, maybe the hours of the workers making them can shrink as well.

Treading ground already well worn by Papa John's (PZZA), Wendy's (WEN), Dunkin' Donuts (DNKN) and Darden Restaurants (DRI), an executive from Northeast and Midwest onion-steamed mini-burger chain White Castle told National Public Radio his restaurants may hire only part-time workers in the future to avoid the costs of the new health care insurance mandate. White Castle vice president Jamie Richardson says his company's health care costs will rise by 24% once the law is implemented.


The Affordable Care Act, often referred to as Obamacare, requires businesses to offer health insurance to all full-time employees or face significant financial penalties. Earlier this month, however, the Obama administration announced that implementing the corporate insurance measures would be delayed until 2015.


Unlike its fast-food and casual dining cohorts, however, White Castle refuses to cut current workers' hours, fire them or slash benefits to comply with the new health care laws. White Castle employs roughly 9,600 workers nationwide, about half of whom are full time and already covered under the company's health care plan. "If you're full time at White Castle, you're going to stay full time at White Castle," Richardson told NPR.


Judging by employers' reaction to the new health care rules so far, White Castle's restrained reaction falls well within the majority. According to a March survey from the Minneapolis Federal Reserve, nearly 90% of employers won't shift full-time workers to part time once the new law takes effect.


The International Foundation of Employee Benefit Plans, an organization of human resources professionals, found that more than two-thirds of companies definitely plan to offer health benefits to full-time workers after the ACA is implemented. Just 0.5% said they definitely will discontinue coverage. More than 90% of companies surveyed currently offer health benefits to full-time workers.


Still, White Castle's Richardson notes that the fast-food industry's margins are far tighter than those of other industries. The profit per employee in restaurants is only $750 per year, he says, which makes adding health insurance as a benefit for all employees over 30 hours, as the health care law requires, particularly painful.


It would take some Harold-and-Kumar-size hunger for Crave Case suitcase boxes of White Castle sliders to compensate for the cost of increased coverage.


More on moneyNOW

486Comments
Jul 25, 2013 4:21PM
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ALL THESE LIBERAL DUMB F+++++++S WHO VOTED FOR THIS IDIOT WILL PAY A BIG PRICE WHEN THEIR HOURS GET CUT BELOW 30 HOURS A WEEK. MAYBE THEY WILL USE THEIR BRAINS NEXT TIME BEFORE THEY VOTE. NOTHING IS FREE WITHOUT A PRICE
Jul 25, 2013 4:29PM
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Defunfd or repeal the Unaffordable Care Act.

The President lied about Obamacare Not being a Tax and the Supreme Court said:Yes it is a Tax. Most Americans don't believe anything coming out of Obamas mouth because he lies so often that if he ever was truthful, we would probably miss it. Instead of Uniting Americans , he will be forever known as the Great Divider. And please don't mention God around him , you might get arrested. 

Jul 25, 2013 4:36PM
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Well, this is what the no information voters wanted.   Let them enjoy part time work, mandated health insurance, drone attacks, NSA recording of everything they do, economic collapse, and horrible healthcare with lines so long they'll go to Canada to get treated.   You liberals wanted to destroy America, well, mission accomplished, now welcome to Detroit on a national scale.
Jul 25, 2013 4:17PM
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Yea, u can keep ur insurance but my wife's insurance is going up 780.00 this yr. So much for savings.
Jul 25, 2013 4:46PM
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Low wage employees getting reduced hours, already barely able to survive, and getting worse, all thanks to OBAMA.

Change, hope, wtf was he talking about. About time for america to follow in the footsteps of egypt.

Best change we could get right now, is obama and biden out of office. By far the worst president we have ever had in all of history.

Jul 25, 2013 4:27PM
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Just another casualty of the big-gov machine.  Most progressive politicians are too stupid to realize is that every franchise is a small business, owned and operated by local people to the benefit of their local communities.   Most of these small businesses employ local people, help out with local civic and charitable projects, sponsor little league teams, etc...  In their haste to stick it to those "evil corporations", politicians are killing main street and all those who make America work. 

Let's see, 60% of all new jobs are created by small business.  We have a real unemployment problem in this country.  Hey, I know, let's screw over small business even more and make it more difficult for them to survive, let alone thrive.  Brilliant!

This is what happens when you vote for a bunch of professional politicians, activists, community organizers and lawyers.

Jul 25, 2013 4:15PM
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JWT503
 The Dumbocrats do the same thing they tell everyone that their free stuff will be taken away if they vote for Republicans.
Jul 25, 2013 4:18PM
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Just one more example of many yet to come . Health insurance has always been a benefit that companies could offer (fully paid , or employee paid or shared cost) or choose not to . And employees could choose to work there or somewhere else . What ever happened to personal responsibility ? Now people want everybody else to supplement there cost ; I , like many other people , have always tried to be responsible and carry health insurance , just like car insurance etc . It is the right thing to do . But I should not have to pay for those people who choose not to carry it . Yes there are exceptions like those who have had a major catastrophe in their life , but most people who are "insurance bare" simply don't want to pay for it and are rolling the dice , hoping they don't need it . THAT is not being responsibile, or fair to everyone else that is being responsible .
Jul 25, 2013 4:17PM
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Obama -  selling frozen turds & trying to convince/bully us into saying its rocky road! It's amazing how many people can't see whats in front of them & insist on sampling. 
Jul 25, 2013 4:18PM
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Impeach this muzlim moron & all 535 members of congress & every communist czar before this antichrist does anymore damage to ths country before all hellbreaks loose.

 

Jul 25, 2013 4:56PM
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Plain and simple..."Obamacare sucks" & will ruin this country.
Jul 25, 2013 4:28PM
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You know you have a extremely bad law when both the Capitalist business owners and the Union leaders hate the law.  

Now the union leaders a feeling the 'bait and switch' of the law.  A letter to Pelosi and Reid:

"When you and the President sought our support for the Affordable Care Act," they begin, "you pledged that if we liked the health plans we have now, we could keep them. Sadly, that promise is under threat...We have been strong supporters of the notion that all Americans should have access to quality, affordable health care. We have also been strong supporters of you. In campaign after campaign we have put boots on the ground, gone door-to-door to get out the vote, run phone banks and raised money to secure this vision. Now this vision has come back to haunt us."

The letter was penned by James P. Hoffa, general president of the International Brotherhood of Teamsters; Joseph Hansen, international president of the United Food and Commercial Workers International Union; and Donald "D." Taylor, president of UNITE-HERE, a union representing hotel, airport, food service, gaming, and textile workers.

Source: Forbes, Avik Roy
Jul 25, 2013 4:51PM
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gil 263.  they do not care.  they do not work. they live on the government tit and have free medical care.why should these free loaders worry about obama care.  they will lose nothing.

"When the populace learns that it can vote itself moneys from the treasury, Democracy is finished."

Ben Franklin

Jul 25, 2013 4:35PM
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So who's still singing the praises of Obamacare?? Or Obama???

Jul 25, 2013 4:51PM
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dont mess with my white castle ,  screw obama and his stupid waste of time healthcare law.  white castle  is way more important to me and the country than obama, heck at least white castle  has created a job and that is more than obama has ever done.  
Jul 25, 2013 4:39PM
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"If you're full time at White Castle, you're going to stay full time at White Castle"

 

$100 says this will change come 2015.

Jul 25, 2013 4:52PM
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We have to wait until the fog clears so we can READ the bill.
Jul 25, 2013 4:24PM
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Start serving White Castles at White House. It's the American way, baby.
Jul 25, 2013 4:48PM
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My insurance the past two years went up 40% and Obama Care hasn't even hit. I am ending all my benefits to all my employees and pay them more if i can. 
Jul 25, 2013 5:18PM
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I will never ever forget Pelosi screaming at the top of her lungs," PASS IT, YOU CAN READ IT LATER!!!!!"!      Is it any wonder why we have a Congress in gridlock???????????????   But then again, ask any liberal and they will all agree that we really don't need to follow the law.  Who needs a constitution to run a country?

 

 

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