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
And thus, the problem with trying to alter a system that's solely for profit with watered-down change. We still have those who can't pay, and those who won't pay, except this time it's not consumers/future patients, but business owners trying to cover them. The law supposedly eased down the healthcare insurance coverage problem, but not the REASON for THAT problem, which is high healthcare costs.
Basically, some people didn't buy insurance because it cost too dang much, and that insurance cost too much because healthcare itself cost too much!
The bright side I can see with all of this is that we'll have to talk about REAL changes soon. Perhaps not an outright repeal (there are some good things, like the end of the "pre-existing conditions" BS), but we'll need an alteration to the formula that isn't just a payoff to insurance companies...
Or maybe just screw it and change the whole system! We might as well go universal. We're already in debt, and no one's willing to actually solve the problem, so let's move on to big things. What else do we have to lose?
Oh, and sidenote: I don't remember a single voice EVER saying that we were going to have "free" healthcare. Healthcare isn't free anywhere around the world, not even in Britain where it's a third of the cost of ours (trade off is, obviously, higher taxes to pay for it).
My daughter is an assistant manager in restaurant in a similar type franchise. They are doing the same thing. Told that for new hires to only be part time (less than 30 hours). Also, by this summer, the existing staffs will have their hours cut. They just can't afford the costs of Obamacare. These idiotic politicians don't understand business. The food industry is working in such a competitive market and at such a small profit margin that they are big losers to this legislation. They can't have business practices dictated to them. It doesn't work.
Everyone was screaming for affordable health care and the president and congress gave us mandated health insurance. First of all, insurance is not health care. The middleman insurance companies get a huge cut out of the money for health care. Secondly, my son who works three part time jobs to get by has no benefits and will soon be penalized for not being given insurance or not being able to afford insurance on his own. Where is the justice in that?
The emergency rooms are still filling up with people for routine care. What the politicians should have done was make more affordable health care. Remember the show Northern Exposure? Why doesn't the government do more like that. Pay for more doctors and nurses to get medical school and require them to work in free clinics all over the country to provide the health care to those who weren't getting any? We need more health care providers, not health insurance bureaucrats.
No more Wendy's for me...and I it will hurt me just about as much as not buying pizza from Papa John's.
OMG OMG. What are we going to do if the fast food industry fails? (That is sarcasm for thos of you who did not get it.)
I don't eat burgers very often, but when I do, I'll go to In & Out Burger where they treat there employee's with dignity and respect.
Proverbs 24;16 For though the righteous man falls seven times, he rises again, but the wicked are brought down by calamity
i love the fact that all you uneducated hippies who voted for Obama are now getting your hours cut and taxes raised, you deserve every bit of it. Dont vote for people becuase of the color of there skin and how cool they look playing basketball.
Copyright © 2013 Microsoft. All rights reserved.
Quotes are real-time for NASDAQ, NYSE and AMEX. See delay times for other exchanges.
Fundamental company data and historical chart data provided by Thomson Reuters (click for restrictions). Real-time quotes provided by BATS Exchange. Real-time index quotes and delayed quotes supplied by Interactive Data Real-Time Services. 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 SIX Financial Information.
Tired of constantly dying batteries, she came up with a device that could revolutionize energy storage -- and won $50,000 from Intel.
- Detroit in hot water over proposal to sell art
- Sears spirals toward oblivion
- Why aren't heads rolling at the IRS?
- Do we pay attention to roads and bridges now?
- Yahoo may be going after Hulu
- Apple's first computer could fetch $450,000
- AT&T adds sneaky fee onto its wireless bills
- Soaring ER use adds more pain to health costs
- Netflix gets 'Arrested Development' stars cheap
[BRIEFING.COM] Stocks entered the weekend on a mixed note as the S&P 500 shed 0.1% while the Dow ended with a gain of 0.1%.
The major averages began the day on a lower note as nine of ten sectors saw losses of more than 0.5%.
The consumer staples sector was the lone exception as the group spent the entire day in positive territory thanks to the relative strength of Dow component Procter & Gamble (PG 81.89, +3.19). The second-largest staple stock advanced ... More
More Market News
Try as the bears might, they couldn't break US stocks. But investors still face frothy prices and considerable headwinds.