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 1:57PM
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Oh, the cost of "free" health care and other stupid dumocrap ideas!

 

Jan 9, 2013 1:53PM
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If you were a good employer, you would have been offering your employees some type of health care benefits, even if you only pay 50% on the individuals premium. That's why we have 40 million uninsured, employers like these that just pocket the profits.
Jan 9, 2013 1:53PM
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Wendy's franchise has more than 50 employees? the healthcare law only effect employers with 50 or more employees. 
Jan 9, 2013 1:53PM
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Any responsible business owner knows that if you want to have a successful business the employees must have a stake in it's success. Instead of trying to find ways to not provide healthcare to employess try working with your employees to gain their loyalty by providing these benefits and thus making the job more essential to them as more than a paycheck but a place where they are invested because now their healthcare benefits are tied to the job making the job much more personally valuable motivating them to be a better employee. It's this kind of short sighted thinking that has driven our country into near economic  collapse by the greedy short term grab all the profit as fast as you can by the banking and insurance companies. Many family owned business' and generational business has endured because of these exact incentives offered to employees to have employees invested into the success of the business. Many people and justifiably so have criticized Walmart for their business practices but I have friends with masters and bachelors degree that work there having lost their jobs in the recession but choose to stay there because they have health care, stock purchase with matching funds, 401K with matching funds and profit sharing. They are vested in the company. Before my critics declare me an idiot I speak from a prospective as a business owner and long experience as a board level manager at a 20,000 + employee health care company that used these same employee incentives to retain and promote from within employees that were vested in the companies success. Business has to pay taxes, worker's comp along with the other cost of doing business expenses. Embrace it and use this opportunity to develop workers that care about the success of the business instead of trying to get around it by cutting hours and further alienating your employees and making them even less interested in the business because it's only a paycheck instead of a place to provide the necessities for their family and life style.
Jan 9, 2013 1:50PM
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Government is the problem not the solution.
Jan 9, 2013 1:50PM
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Don't  you think Obama knew that in the first place. This is just one more of his many ways to destroy the USA.
Jan 9, 2013 1:46PM
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Ironic that obesity, thanks in part to the fast food industry is quickly surpassing tobacco as a major drain on the healthcare system.

DA Da Da Da Daaaaa I'm lovin it.

Jan 9, 2013 1:45PM
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The inept, ignorant citizens who re-elected the tyrannical Obama have placed the Obamacare burden upon all of our citizens.  Thank you for not thinking thru who you should elect.  The republic is consequently going down the tubes, as a result.
Jan 9, 2013 1:45PM
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"...the cuts are coming in several weeks’ time because he cannot afford to pay health insurance for all his employees."

I'll bet he can still afford a Mercedes and a huge house. Basically, instead of being responsible for his employees he would rather the burden of the uninsured be placed squarely on the lap of the taxpayers (as is is now). We will all pay for this anyway people. Either the business owners help out and take responsibility or they go to the emergency room and we all pay for the bloated bill instead.
Jan 9, 2013 1:44PM
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now as they cut hours, tax's taking out of their check also will be cut. i wonder if obozo thought of that, no tax's yikes, less hours less tax money. am i saying this right?

 

 

Jan 9, 2013 1:42PM
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i will not ever go to wendy's again!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
Jan 9, 2013 12:24PM
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You schmucks are getting exactly what you deserve.  We have all these "smart", unemployable people in Washington who have no idea what it takes to run a business but think they know how to regulate business.  Over regulation is leading to underemployment.  New overtime hour as well as ObamaCare requirements are leading to massive hour cuts and lost wages.  If you think responsibility begins at the top, try starting a business with the "war on business" environment this administration has and YOU pay for someone "free" healthcare.  This is only the beginning SUCKERS.
Jan 9, 2013 12:13PM
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The Wal-Mart standard is becoming mainstream now.  Sad thing is that the reason this is even possible is because there are plenty of unemployed people that would rather have some job than no job because there is an excess in the working population, which is also driving down wages.  If there was full-employment this type of thing would never happen but as that is not possible, this type of thing will continue as the company will simply find someone else to do the job for that price and the companies that do offer higher wages are less favorable to investors as they don't show excessive profit projections or quarterly profits as they are more concerned with maintaining quality than providing a cheaply made piece of crap.  This starts with responsibility at the top.
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