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."
More on Money Now
- Is a global sushi craze emptying the oceans?
- Can Eddie Lampert save Sears?
- Allstate tries to fix a public relations blunder
In 2011 Papa John's net income was slightly over $55 million. Having to fork out $8 million to provide healthcare coverage for all of their employees would only leave them $47 million a year in profits, which would be devastating to the point that CEO John Schnatter might have to take a pay cut from his almost $3 million a year to $2 million a year...how in the world will he ever survive on that? He might even be forced to sell some of his stock in the company valued at almost $240 million. Dang, just with his stock alone he could cover every Papa John's employee for 30 years.
Folks, all of their rhetoric stems from greed, not job creation. I hear it from a CEO that I sit next to in the boardroom. They want to keep excessive profits and let average Americans foot the bill for uninsured hospital visits in the form of higher taxes and increased medical expenses for all. If we allow employers to not cover their employees, that is basically a bailout for them. Think about it.
IDIOTS , Welfare Parasites, aka 'LOW INFORMATION VOTERS" have re-elected these Gangsters into the White House and the Congress mostly DEMO-CRATS, LIBERALS, now the effect of their "RISKY SCHEMES" are being felt across the Land!
gotta love Irony........ the companies the peddle cheap unhealthy food and are a big reason for Obesity.....doesnt wanna pay health care. \
Wendy's is an owner, operator, and franchiser of 6,543 fast food restaurants. Of those, 1,447 of the restaurants are owned directly by Wendy's, with the remainder owned by franchisees.
The top 25 per cent of stores (based on profit) from 2009/2010 had average sales of $485,000 and average earnings before interest tax depreciation and amortisation of 22 per cent
it would cost the average franchise owner apprx 18k per year for 10 full time employees. (that is assuming the company will cover 1/2 the cost and the employee the remaing 1/2.)
this shouldnt hurt the top 25% but it will be touch on the bottom 25%. the bottom line is people that have ZERO health insurance have the same chance of getting hurt or sick as people that do have insurance. i have seen first hand when people come into the ER....injured...sick..... without insurance...guess what. we stilll help them. they get the same care as an insured patient. what happens is the hospital is forced to write off these outstanding unpaid bills. in turn you the tax payer, you the insured patient is forced to pay.
i do not think it is unreasonable for these "small" buisnesses to help pay the cost of health care for their employees, and i do not have a problem paying 1.25$ instead of .99 cents for an item off of the "value menu" to help cover these costs.
this should be a republican/democrat issue. this is a human issue and we are all humans.
Oh, by the way. There's a $300.00 penalty per child for those of you who (according to Obama and friends) are so irresponsible as to not purchase healthcare insurance.
Not sounding like "healthcare for everyone" now, is it?
It's okay to elect someone who advocates war and is against women’s rights, gay rights and builds obstacles to voting but not easy health care for everyone. Give me a break.
The CEO's of Wendy's and Papa Johns need to go back to business school and learn strategies on how to compete when change happens.
About 53 -54 percent of the country voted for this president.. You now get what you voted for.
Continued high unemployment, high debt ,more taxes. and small business being hurt..
But wait most of those voters can't read these comments because they are on goverment assistance,
Oh wait ,t They have also been given Free computers, phones and I-pads so maybe they can read this.
I too watch those programs. We have a small business and we provide insurance.
With the affordable care act we are going to get compensated to provided insurance we have just under 50 employees and we are growing so, we will be hireling more people and we will provide insurance. We don't make the money Wendy's makes but, we are not greedy.
Does anyone that actually thinks beyond an 8th grade level expect businesses to simply accept this law and not make adjustments? This is just the tip of the iceberg as the burden of Obamacare becomes more and more a reality.
Further, what happens to healthcare when doctors who are receiving reduced payments stop accepting new patients, or retire, or worse yet, the next generation of doctors simply choose other professions?
And let this be lesson to all of the "living wage" supporters - with Obama in office, you may get your living wage, but expect a significant increase in unemployment. I ask all of you, which is better for the overall economy, 2 people employed at $7/hr or 1 person at $11/hr? Do not forget that a majority of minimum wage workers are teens with limited skills, knowledge and experience. For those adults on minimum wage, why? What has prevented them from moving up the wage scale as they gain knowledge, skills and experience?
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.
[BRIEFING.COM] Equity indices have taken a step back from their best levels of the day in reaction to a Reuters report indicating European officials have reached a preliminary deal to introduce sanctions against Russia's oil and defense sectors.
While the agreement has not been made official yet, the announcement is likely to lead to speculation about a potential boomerang effect on the global economy.
According to the reports, the sanctions will be in place for three months ... More
More Market News
'We're not exactly in a uniformly strong market,' says the notably pessimistic newsletter publisher.
MUST-SEE ON MSN
- Video: Easy DIY smoked meats at home
A charcuterie master shares his process for cold-smoking meat at home.
- Jetpacks about to go mainstream
- Weird things covered by home insurance
- Bing: 70 percent of adults report 'digital eye strain'