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."


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1965Comments
Jan 9, 2013 8:51PM
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Don't worry, Wendys and Papa Johns is just the tip of the iceberg.  As things get worse and others either drastically raise prices or cut hours, or both, the government will step in and do what is necessary to fix everything.  Increase spending.  Free money, printed as needed.  Everything will be ok, bigger government and more spending will fix it.  It might be necessary to raise taxes, especially on the evil rich because everyone knows that they have plenty even if they shut down their businesses.  
See how easy that was?
More spending.
More taxes from the evil rich.\
Free money.  
All is well.
Jan 9, 2013 8:50PM
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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. 

Jan 9, 2013 8:47PM
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I blame EVERY JACKASS that voted for this P.O.S. dictator!! Obama is THE WORST PRESIDENT EVER!!!!!!!! Dumicrats are too stupid to realize they are communists bancrupting this country, a planned stragey from George Soros, Arianna Huffington, Warren Buffet and secret foreign donors. 
Jan 9, 2013 8:47PM
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call my President what you please blame him for the rain ! but what you don't see beyond the curtain is  the fact that many companies golden parachute upper management and piss on the line workers. Joe Lunch Bucket (the guy working next to me )  can fall over and die for all they care ! there are hundreds more like him begging for jobs to feed their families.!  are we not THE UNITED STATES ! working together for everyone's survival ?
Jan 9, 2013 8:46PM
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The salient point here is that Wendy's Corporation should be providing health care for its employees; franchise owners should not be burdened with that at each individual location. Apparently they are too busy vacuuming millions from our obese nation by selling the over processed garbage they call food. It's almost ironic - they sicken millions of gullible Americans, then deny them health care.
Jan 9, 2013 8:46PM
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Hasn't anyone noticed that corporate America has been taking advantage of their employees for years now?  Denying us raises, promotions, benefits and any sense of stability.  First, it was the uncertainty over who would be president - Gore or Bush.  Then it was uncertainty over 9/11.  Then it was the uncertainty of war.  Then it was the uncertainty over who would be president  - McCain or Obama.  Then it was "will Obama be re-elected"?   Now it's Obamacare.   Corporations use any excuse to panic and shut down for the next four years.  As long as they get their million dollar bonuses, they won't care about us. We were "all in this together" during 9/11, but Wall Street learned from that.  They learned that they can cry poor mouth and con/scare us into doing without.
Jan 9, 2013 8:45PM
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The libs have sewn the seeds  now they will reap the whirlwind...............  They just keep poking the tiger and are just too stupid to know it
Jan 9, 2013 8:44PM
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This is just the beginning of a cascade of "pink slips" that will be issued to employees across the spectrum of the American workforce from here on out. The current news that employment "grew" a paltry 155K jobs last month is a joke, but the real joke is on the American people who "voted" Obama back into office. 
Get used to the "new normal" America you brought it upon yourselves, sad to say.
Jan 9, 2013 8:43PM
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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?

 

Jan 9, 2013 8:42PM
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Let me know what damn buisness dosent want to provide health care and i ll save my money and wont go there, the last time i went to Wendys the burger and fries were cold and awfu and i paid $8.00 for the privledge . I only order Papa Johns because they deliver that industrialized pizza late in Reynoldsburg,ohio quality sub par to say the least $15.00.Yes,you can pay and you should that horrible food the two of you dish out cost nothing to prepare the people of the future work hard and need healthcare dont even let me get started on Speedway in Ohio and some of you others.Cut staff and hours and see how long i wait in line for your junk ,peopele these are your children working here not mine family members and such,I am my brothers keeper and believe healthcare now healthcare forever  for people who dont want the sick and vunerable hovering over your food.Get some sense please.
Jan 9, 2013 8:42PM
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A lot of the kids employed in fastfood are still under their parents health coverage, so this is bull. 
Jan 9, 2013 8:40PM
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So I guess it is better that big business does what ever they want and make BILLIONS!  As we suffer for working for them.  America needs to wake up and start banning business that want to play that game of laying off or cutting employment instead of taking less profits or cutting multi-million dollar bonuses.  If we keep on this trend of them making as much as they can with out any regards to the people working for them and you need a welfare package at new hire their is something wrong.  We can easily fix this attitude of big business, by not purchasing from them, Wendy's, Wal-Mart, Oil, etc.  We the people need to stand strong, and make it right in this country before a revolution erupts.   If we stood together it would only take weeks to have changes made if no one patronizes the business that think they do not need to insure us.  One illness should not have to wreck your life for the rest of your life like it does now.  Health Care needs a major overhaul as well, but no one should die or live with horrible diseases because our big businesses need to report an even higher profit.  PEOPLE please band together and stop the big business from hurting us and our economy even further!!!
Jan 9, 2013 8:38PM
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I GUESS THIS IS MANAGEMENTS WAY OF SAYING THEY ARE BETTER THAN YOU.
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.

Jan 9, 2013 8:38PM
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We need to continue to employ our own Americans, regardless of age, nationality, race, IQ, etc..  THEY ARE WORKING.  If we can't get our own to work these poor paying, hard working, verbally abusive jobs, they will continue to be filled with illegal immigrants, then we have even a bigger problem.  The food industry is not easy, look at how many of you are degrading the employees intelligence  for just working at a Fast Food establishment, now times that by 20 for all the people that scream and yell because of a pickle on their burger.  C'mon, just people trying to make a living to feed their families like you and I.  Boycot WEndys, Papa Johns, Walmart and all the other corporate/own/op fools that don't understand that you need a good team of employees to have a successful business.  I hope Patrick Dempsey gets it right with Tullys coffee
Jan 9, 2013 8:37PM
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All you idiots who voted for Obama you're getting what you deserve.
Jan 9, 2013 8:37PM
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Just think of all the jobs that are created.  If the Wendy's believes that having more workers to train and  those workers will look for better jobs  to make money seems like economic principles at work.  Good luck staffing when most are looking for other jobs with more hours.  The turn over rate will increase.  
Jan 9, 2013 8:36PM
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Wendy Thomas you are a disgrace to your fathers name!
Jan 9, 2013 8:36PM
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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
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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
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