Wendy’s franchise cuts hours to avoid Obamacare

The action is the latest in a series of challenges against next year's implementation of the Affordable Care Act.

By Bruce Kennedy Jan 9, 2013 10:13AM

Doctor sitting in office with patient talking and smiling -- Paul Bradbury, OJO Images, Getty ImagesThe small-business backlash against Obamacare continues. A Wendy’s fast-food franchise in Nebraska is cutting the hours of non-management employees so its owners won't be required to pay health benefits.


The local franchise vice president in Omaha tells WOWT-TV the cuts are coming in several weeks’ time because he cannot afford to pay health insurance for all his employees.


Starting next year the U.S. Affordable Care Act, also known as Obamacare, will require employers with 50 or more full-time employees to offer full-time workers "minimum essential" healthcare coverage. The Act defines a full-time employee as someone who works at least 30 hours a week.


As a result, about 100 Wendy’s workers in Omaha have been told their hours are being cut.


"It has a huge effect on me and pretty much everybody that I work with," T.J. Growbeck, who currently works 36 to 37 hours a week at the restaurant, told WOWT. "I'm hoping that I can get some sort of promotion because then I would get my hours, but everybody is shooting for that because of the hours being cut."


Wendy's spokesman Denny Lynch told the Huffington Post the decision was being made at the franchise level.


"Our franchisees are independent businesspeople, and they make the decisions regarding their restaurant teams," he said. "As small-business employers, our franchisees are facing rising food and operating costs and many new government regulations."


While Wendy’s says the hours-cutting action by its Omaha franchise is not "a company decision," several major restaurant chains have been very vocal in their criticism of Obamacare.


A case in point: Papa John's (PZZA) CEO John Schnatter said the Affordable Care Act would cost his company up to $8 million a year, which would force him to increase product costs and cut workers’ hours.


Other restaurant franchises, meanwhile, are also looking at options ahead of Obamacare. John Rigos, owner of a Five Guys franchise in New York City, told CBS News the new regulations will affect hiring policies at his restaurants. 


"It'll probably have to reduce the staff to some degree," he said, "and again, focus on building [a] smaller stronger team rather than being as aggressive in opening up new stores and creating new jobs."


Rigos said while he "absolutely" supports Obamacare, he still finds it challenging.


"There's 25,000 restaurants within the New York City market we're competing against," he notes, "so it's not like we have surplus profits that we could just earmark a portion of them to go toward these types of initiatives."


More on Money Now


1973Comments
Jan 9, 2013 8:36PM
avatar
Wendy Thomas you are a disgrace to your fathers name!
Jan 9, 2013 8:36PM
avatar

Lets do the math. Papa Johns or any other large franchise has how many employee's??? Don't know for sure so lets say 50,000. Now he claims he will lose $8,000,000. per year. 8 mil divided by 50,000 employees is $160. per year per person. Divide that by 12 months per year and you can deduct $13.33 per person per month. If they work 30 hours per week at $9. per hour (Less then that though as they pay so well) you have to ask the employee to reduce there hourly wage by .11 cents. Yet they want to cut there hours so they do not have to pay the insurance.

 

Ok so lets look at it in reverse. If you were to reduce the hourly rate or number of hours to reduce the pay per person by $9.00 per week and you times that by 52 weeks you get a savings of $468. per person per year. Times that by 50,000 employees and you save $23,400,000. per year total. Deduct the $8 mil he says he will lose and your PROFIT, YES PROFIT is $15,400,000. per year. Now do you still want to take the side of the little rich guy or do you think he is playing you? Yet he says he has to cut way back on hours, I showed an example of just one hour per person per week and he generates over $15 million dollars. Yeah, lets blame it on our president. Open your eyes.

Jan 9, 2013 8:35PM
avatar

Kudos to Wendy's. I encourage every business to keep the same profit margin pre-Obama care by crawling through every legal loophole they can. If people expect that this is simply going to have to be the way things are done in today's world, I encourage THEM to volunteer an extra 5% out of their own paychecks to pick up the slack for those who refuse to knuckle under.

 

I also encourage workers, including the self-employed, to crawl through every legal tax loophole they can get themselves through to avoid having their hard-earned money go to every lazy chronic couch-potato handout social program in the country. The more money you save, the less goes to them. I'm not talking about SS or other entitlements that people have actually WORKED AND PAID MONEY TOWARDS. I am talking about financially supporting the chronically lazy practically from the time their lazy parents gave birth (as with your ever-worshipped obamacare), through to their deaths. Ain't my problem. What have you contributed to me? Nothing? Then you get nothing, or hopefully next to nothing.  

Jan 9, 2013 8:34PM
avatar
Welcome to Obamaville!  Congratulations!
Jan 9, 2013 8:34PM
avatar
Another restaurant to boycott.  Greedy, highly compensated CEO's taking it out on the low paid employees again.
Jan 9, 2013 8:33PM
avatar
what a great mooslim pres. we have!!


Jan 9, 2013 8:32PM
avatar

Don't like obamacare,then next time you injure yourself put a Wendy burger over the injury.ha,ha

 

Jan 9, 2013 8:31PM
avatar
What a surprise. NOT. I don't blame Wendy's in the least.  I think we'll be seeing a lot of this happening.
For all of those who believe in the tooth fairy, and Obamacare, here's a newsflash: There is NO free lunch, and NO free healthcare. If it's free to you, then someone else is paying for it. I don't call that free. I call that subsidized.
And the last thing any of us need is for the government to be running healthcare. Heck, our government messes up most everything it gets its hands on.

Obama continues to be the downfall of our country; he's the worst president ever. He's killing businesses and transforming the U.S. for sure, in a negative way that will take us a long, long, long time to recover from.

Jan 9, 2013 8:31PM
avatar
This is NOT unexpected to many that have the forethought to look ahead to human behavior. Push come to shove, when people have to choose between themselves and their business or livelihood they will always choose themselves whether they are rich or not. The idea to provide healthcare to everyone is an idealist's way of thinking. Or is it part of a plan to install more of the government and it's control over every aspect of your life? In a perfect world this would work but people aren't perfect. If this is part of a plan to expand government the people planning it know that it would have failed completely if they had put in all the rules, regulations, and taxes to close the loopholes to force every business to provide health care. It would have been obvious that the expansion of government would consume the economy and take over an individual's rights. It appears that this may just be the beginning as new laws take effect. I can see the economy slowing down and possibly reversing again within the next 1-3 years. Lay-offs and smaller paychecks will lead the way and it will domino until something is done or there is complete economic failure.
Jan 9, 2013 8:31PM
avatar
So how does Canada do it? Is  America that clueless on how to give benefits to employees or are we just trying to squeeze the most profit by squeezing the people who work for us? 
Jan 9, 2013 8:29PM
avatar
There are always negative consequences to the liberal agenda.    They never understand that actions beget actions.   Liberals are clueless when it comes to outcomes in the real world.   Who do they are going pay for their schemes?   Rich people, that's  laugh!    You can not help the poor by hurting the rich.   Sorry if you can't handle that truth.
Jan 9, 2013 8:29PM
avatar
It is not like employers weren't already seeking ways to avoid offering health insurance prior to Obamacare. It now gives employers something to blame rather than their own greed. I can understand a struggling company not being able to offer health insurance but an entity that makes millions per year and has a CEO that earns millions not so much. Nothing motivates a worker like good wages and benefits yet it seems the Profits before People camp would like to see American workers motivated by desperation. For those that don't want to support a bunch of mooch bags and pay for their healthcare, you do realize that would require people to be gainfully employed? Working 30 hours a week at Wendy's isn't going to pay the bills or get anyone off the dole. It just seems their is animosity toward Americans who are unemployed or underemployed when most of these individuals would love to be gainfully employed and able to support themselves and their families. Low paying service industry jobs create government dependence.
avatar
Yeah, I felt so sorry for the CEO of Papa Johns.  Instead of taking home fifty million like he did last year by paying dirt-poor wages and NO ONE EVER GETS FULL TIME IN HIS RESTAURANTS, he only gets to take home 42 million but his employees would at least have health care.  Poor guy.
Jan 9, 2013 8:27PM
avatar

Wow. I didn't realize how many disengenuous, party-faithful folks would still be out spewing this stuff (crap)  post election.

 

Vote for your favorite Tea Party candidate. Here's what you get. More wars we can't pay for because they won't pay for them. And then won't raise the debt ceiling to pay for what they authorized. But we definitely need them. More potholes in your roads. Because you need taxes to pay for repairs and we can't have that. How would the big banks be able to keep paying obscene bonuses to establishments  that are too big to fail. (AIG contemplating suing the government for bailing them out?)

 

Quit referring to Medicare and Medicaid  as "entitlement" programs. We paid for them

 

I, and my cohort, paid taxes throughout our working lives to achieve what was promised/guaranteed to us for paying into a system that would  cover our medical costs .

 

If the money isn't there to pay the bills, who's culpable? I'm pretty sure it isn't me  or all the folks who've paid into the system lo these many years.

Jan 9, 2013 8:27PM
avatar
I've never read so much drivel in my life. Case in point. John Scnatter, CEO of Papa Johns, whines about his inability to pay $8 million dollars a year for Obamacare, yet he posts a commercial that states his goal from November thru December 2012, is to GIVE AWAY 2 million pizzas. Now, I may not be the sharpest stick in the pile, but if I were to SELL those pizzas for $10 a piece, that would be $20 million dollars. If I were to sell them for $5 a piece (WHAT A GREAT DEAL!) that would be $10 million dollars. He could certainly pay for insurance then, now couldn't he? AND have $2 million in profit to go F*CK himself with! Crybaby S.O.B. 
Jan 9, 2013 8:27PM
avatar
That's OBAMACARE.. We are hard worfking folks that can't afford to insure my daughter as it is 500.00 a month to add her to my insurance. Hey, we gotta pay for all the folks that don't care about pay for theirs. It sucks!!! It will get much, much worse too.
avatar
Competition should not be an issue in the case of fast food franchises. They are competing against each other and all have the same rules to meet so there is no competitive advantage. The problem is really that the ownership is seeing this as an opportunity to get an advantage on their competition and hiding behind the health care law.
Jan 9, 2013 8:27PM
avatar

Since Romney was going to can ovomitcare, wonder if any libs are having second thoughts.  course with less hours, 30 hours is full time since when?, there will be more people on food stamps.  course then with the loss of hours, and jobs, less tax money to pay for the food stamps and welfare.  Which if the food stamp/welfare program goes under, then everybody will have to get a job, except there wont be any jobs. 

How to get rid of america.  Destroy the middle class, and get everyone either paying massive taxes, or on the govt dole, or get them to move out of country.  and then we will have the perfect socialistic state.

Bunch of liberal sheep barfing the party line, which is BS have destroyed the US.  Sad thing is they are still jumping up and down barfing the party line. 

Course since the fiscal cliff is over with, now we get into ovomit giving out free green cards.

Jan 9, 2013 8:27PM
avatar
Easy checkmate, Just STOP eating at ALL WENDYS across AMERICA and things will change in one week!
Jan 9, 2013 8:27PM
avatar

This is bull.  Only thing wrong is that fast food has gotten used to ridiculously high profits mostly by not paying their workers a living wage.  I've never seen a fast food place where the workers are goofing off...and they are getting slave wages with a dime raise if they are very, very good slaves.  Once a company gets a certain profit percentage, they then think that is what they deserve..no matter how high it is and regardless of the outrageous salaries the bosses pay themselves.

 

I know I'm no longer eating at Wendy's...and I like their hamburgers and there is one right by my house.

Report
Please help us to maintain a healthy and vibrant community by reporting any illegal or inappropriate behavior. If you believe a message violates theCode of Conductplease use this form to notify the moderators. They will investigate your report and take appropriate action. If necessary, they report all illegal activity to the proper authorities.
Categories
100 character limit
Are you sure you want to delete this comment?

DATA PROVIDERS

Copyright © 2014 Microsoft. All rights reserved.

Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.

Trending NOW

What’s this?

MARKET UPDATE

[BRIEFING.COM] The stock market maintained a narrow trading range on Thursday before ending the session essentially where it began. The S&P 500 added less than a point, while the small-cap Russell 2000 (-0.2%) underperformed.

Equity indices displayed early strength thanks in part to an overnight boost from better than expected economic data in China and Europe. Specifically, China's HSBC Manufacturing PMI surged to an 18-month high (52.0 from 50.7), while Eurozone Manufacturing PMI ... More

MSN MONEY'S