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.
The 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."
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Focusing just on the fast-food industry for a moment, they seem to be getting a double-whammy by the government. Separate from the morality of giving employees healthcare options, the Affordable Care Act regulations will cost more money to restaurant owners. That's an indisputable fact. It doesn't mean that ACA shouldn't happen, but ACA supporters can't ignore the real-life effects it will have on a large protion of the American population and the economy. So that's one whammy, rise in costs (some businesses can survive, others probably won't).
The second whammy for fast-food restaurants - While ACA kicks in (and the real effect can't be accurately examined til 2014 when everything takes place), the White House and liberals demonize fast-food as so unhealthy it's criminal in their perspective (think of all the bills to ban ingredients). It's pretty indisputable that eating fast-food regularly with inadequate exercise is bad for us, but there is a limit to how healthy a restaurant can become before it can no longer deliver the speed and convenience many of us rely on. At what point will we stop trying to ban and regulate what they need to do to produce edible (maybe not healthy but still edible), affordable, time-efficient food?
I live 15 minutes from my work and have 1 hour lunches. I have to drive back to the area where I live to have access to any restaurants because my employment is in a prison and so the surrounding areas are farms and small offices. Driving alone takes half my lunch, so I can't go into healthier sit-down restaurants. And before people attack me about going out to lunch, I typically pack lunch or buy lunch from the staff grille where inmates cook for staff. But I doubt most work environments have a staff cafeteria, and even an hour lunch can be short for healthier lunch options.
So ACA plus the war on food options can really hurt the fast-food industry. Maybe some people want that to happen, and maybe it's for the greater good. But if that's the case, or you're a person who believes that it should happen, then just say it! But please don't post comments that ignore reality and only focus on bashing opposing views.
And just so I'm clear, liberals need to stop making excuses for the ACA and the war on fast-food. I get it, you want it all gone and for business owners to have exactly and only what their employees have. Fine! But don't pretend like you have a better argument or logic because you ignore signifcant realities and facts.
Can't blame Wendy's at all for doing this. They have to survive in order to give people work at all. Blame ot all on the HOPE and CHANGE this country voted for. How is it working for ya obama supporters?
YOU KNOW MANAGEMENT WILL BE SURE THEY ARE COVERED BUT NOT THE PEOPLE THAT DO THE HEAVY WORK.
THERE IS ALWAYS SOME SCHMUCK WHO REALLY DOES NOT CARE ABOUT HIS EMPLOYEES AND TRIES TO STEAL OR CHEAT THEM OUT OF WHAT THEY DESERVE.
IF YOU PEOPLE WAKE UP AND START THINKING,IF PEOPLE GET COVERAGE THEN THEY WILL HAVE MORE MONEY TO SPEND ON OTHER PRODUCTS THAT WILL MOST LIKELY LEAD TO MORE HIRING.
I GUESS THE TEA PARTY IS NOT THE ONLY ONES OUT THERE TRYING TO DESTROY THE AMERICAN DREAM.
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.
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.
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