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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1973Comments
Jan 10, 2013 3:29PM
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How on earth did the small hardware store I worked for 20 years ago afford to offer healthcare for its 8 employees?!  Oh yeah, my boss wasn't a TOTAL greedy a-hole & actually gave a crap about the people who worked for him. 

Jan 10, 2013 3:26PM
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If you have a real job to start with your hours wouldn't be cut. Fast food chains have never had any benefits for workers and has always made sure nobody would get overtime while getting big tax loopholes at the same time.Cant take the heat its time to close the kitchen.
Jan 10, 2013 3:26PM
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If you run your business so badly you can't provide healthcare to your employees, then go out of business and let someone who can provide healthcare take over.
Jan 10, 2013 3:18PM
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I am boycotting Wendy's. Their food is pretty crappy anyway...
Jan 10, 2013 3:16PM
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We are paying for their healthcare whether we have Obamacare or not!
Jan 10, 2013 3:12PM
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Hours reduction has been a common practice for years. It's all about sales results, now we use health care act to fuel the fire instead of offering infromation to help improve life in the United States.

Jan 10, 2013 3:07PM
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Wendy's is a large company and they as well as other big companies should leverage their corporate size to get affordable health coverage for their employees and make it part of their benefit package to their employees. The employees should be required to match the employer contribution towards this cost.

There should also be reasonable deductibles and co-pays in place to limit going to the doctor or hospital for non-essential visits.

 

Jan 10, 2013 3:06PM
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I think everyone should have health care but the cost has to be borne by everyone, not just the small business owner.  Looking at the malpractice industry and costs to Dr. of doing business can't be ignored as it has been to date.

 

Jan 10, 2013 3:06PM
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good for them, the government has no place in healthcare or mandates to buy something from a third party.  I have a bunch of new companies to support this year.  wendys, hobby lobby, chick fila, and the local gun range as it is my right to own a gun  and  they cant take it from me
Jan 10, 2013 3:04PM
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The 47% underinformed idiots in this country voted for this Progressive Marxist; unfortunately, the informed intelligent voters must suffer.  Obama hates our free-market system.  With unemployment still at double digits, the real numbers have not been reported since he has been in office.  Socialism does NOT work; just look at Europe, etc.:   Welfare, Social Security, and all free-loader programs must be eliminated if the USA is to survive.  You work, you eat; you don't work, you don't eat!  God Bless America
Jan 10, 2013 3:01PM
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Heck, i thought Obama was going to create millions of jobs for Americans. Looks like the oposite is happening. I just thope the 51% club is happy now. Cannot wait to see what happens when Obamacare really kicks in.
Jan 10, 2013 2:58PM
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So what did Obama and Pelosi think was going to happen, when they put the burden of insuring the people on business. Morons both of them.Im self employed and my health ins. for my wife and i is 1200.00 per month with a 1000.00 deductible .under obama care, pelosi was all smiles when she announced ins. was available for 1500.00 per month, thats twice what my mortgage is.So now I'm going to be forced to choose my health care or my home. JAIL OR FORECLOSURE IS THAT REALLY A CHOICE??
Jan 10, 2013 2:54PM
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Jeez 8 million Dollars! It seems that these billion dollar companies would rather cut hours on their already low paid employees than suck it up and just pay it. That's the Walmart mentality. Cut hours and wages so that their employees have to go and get on whatever State or Federal health and welfare program there is. After all CHEAP PIZZA and HAMBURGERS is what America REALLY WANTS and Needs. That's  all  the Conservatives and LIbertarians was offering in this last election, More Corporate profits at the cost of wages and hours. That's why the CORPORATE HEDGE FUND HYENA  that knows all about business LOST.
Jan 10, 2013 2:53PM
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It's all BUSH'S Fault!!!!!!!!!!!!!!!!!!!
Jan 10, 2013 2:51PM
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Way to go OBAMACARE. Now we get screwed on the backend too
Jan 10, 2013 2:49PM
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The reason why Obamacare came into effect is cause insurance companies thought it was "ok" to operate UNETHICALLY. Like to not cover those with pre-existing conditions or not cover a life threatening issue. Although I don't agree with all of Obamacares provisions SOMTHING had to be done cause insurance companies LOVE to just pay out as little as possible or even deny payment of a service. WHY HAVE INSURANCE IF THEY CHOOSE TO NOT COVER YOU WHEN YOU NEED IT?! This is WHY Obamacare came about.... insurance companies always try to screw people over EVEN if its a life or death issue. SAD!!!
Jan 10, 2013 2:48PM
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Votes have consequences.  The fools who voted this clown back into office should be the first ones to lose their jobs....
Jan 10, 2013 2:42PM
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LOL at all you people who think a job HAS to provide HC to its employees. Where did you get this non-sense? Oh that is right from the Community Activist who has never run a business in his life and makes a living off attacking business by pandering to the "employees" who feel it is ok to take things from other people. I guess you people have never owned a business or you just do not give a f^&ck and want to take things from other people which is what most of you scum bags are.

Jan 10, 2013 2:37PM
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It's disheartening to read all the naysayers and negative comments pertaining to our elected government. 

If it weren't for governmental regulation I, and my female counterparts, wouldn't have the right to vote, discrimination would run rampant, children would be forced into child labor, workplaces would be unsafe and insecure, etc. True, some problems are relieved through the natural order of things - employees would refuse to work in unsafe environments - but other things need the guidance and regulation provided by government or changes would not occur. 

I refuse to think that a Wendy's or Taco Bell franchise is unable to provide or contribute to their employee's health and wellness. I work for a small business (150 EEs) and we are able to provide health insurance, 401k matching contributions, vacation, sick leave, etc. We do this because we know it's important to our employees and, in turn, helps our company by making sure we have healthy workers who can contribute to the company mission of service. 

I find it hard to believe that these franchises can't make the same sacrifices for their employees. They just choose not to. Which is more of a reflection on them than it is on governmental regulations. 
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