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 6:48PM
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To say that "Our franchisees are independent businesspeople, and they make the decisions regarding their restaurant teams...our franchisees are facing rising food and operating costs and many new government regulations" is well-worded cop out. Is this part of "The Wendy's Way", or perhaps "That's Better?".

 

If Wendy's is a serious American business, they will revise their version of "don't ask, don't tell" policy for franchisees and give reactionary partners such as this example from Nebraska a 90-day period to meet their obligations as a quality employer or be removed from their contract to sell Wendy's products.

Jan 9, 2013 6:47PM
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Whoa! Aw Shootz!! I bet they didn't think that would happen," Dammit Peoples.."
Jan 9, 2013 6:47PM
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Selling our country out? did not start with Obama, just is getting out of control. What other country besides Canada requires labels on products to be bi lingual? NONE! They want to live here they have to speak english in public or get the hell out of here and go back to where they came from.
Jan 9, 2013 6:47PM
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In the rest of the industrialized countries they don't have a problem except in the USA.  Corporate greed.  They all want people to work for the least amount and no benefits while they are buying their next mansion or yacht.  You guys don't complain about the price of a Mercedez Benz which pays for higher labor cosrt and better standard of living for the germans.  But you want to screw our own people.  Company Cruises built all their ship in Germany, France, Italy, Norway, etc and provide higher wages to their people.  But not here in the good old USA.  They don't blame the Unions.  When the USA was a power house was 51% unionized.  Keep drinking the tea mentality and we will have cheaper labor cost than China.  Well, that is already happening.  Perhaps we can beat Vietnam and Thailand with lower labor cost. 
Jan 9, 2013 6:46PM
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It is clear to me that the muslims cannot defeat America via military action but they can defeat America from the inside.  Obama is a muslim and he is working very hard to destroy America.  The dumbed down polulace is too stupid to realize it becasue they are too busy looking at the fake entitlement carrot dangling in front of their very long noses.
Jan 9, 2013 6:45PM
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Barry, and all of Capital Hill, need to be publicly executed for treason against the nation.

And everyone who voted for Barry should be locked up.

Jan 9, 2013 6:45PM
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Go for it Wendy's, I said this from the beginning but, people blind and stupid didn't want to hear it, now they can crly in their beer if they can afford one?
Jan 9, 2013 6:45PM
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Free healthcare and 200 months Unemployment, .......... then what?.......... LOL!
Jan 9, 2013 6:43PM
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THOSE EMPLOYERS PAY WORKERS MIN. WAGE FOR 15 YEARS OR MORE SAME AS ROMNEY WOULD DO
Jan 9, 2013 6:43PM
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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).

Jan 9, 2013 6:41PM
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Look at your checks democraps.  Thank yourself for that deduction.  Its all coming around now isn't it.
Jan 9, 2013 6:41PM
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My impression is that franchise owners and greedy owners like Schnatter simply don't want to cut into their exorbitant profit margin. Do they care about their employees? Not a chance, its all about maximizing profit versus paying a decent wage in the first place.
Jan 9, 2013 6:40PM
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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.

Jan 9, 2013 6:38PM
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So the fact these employees will now have health insurance and come off federal/stated based programs is a bad thing? Do you really think it saves us money having them run to the ER when they get sick? Come on!
Jan 9, 2013 6:38PM
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No more Wendy's for me...and I it will hurt me just about as much as not buying pizza from Papa John's. 

Jan 9, 2013 6:37PM
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I have been a fan of Wendy's but in view of this decision, I will henceforth boycott all Wendy's.
Jan 9, 2013 6:36PM
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Because three years was enough time to have a birth certificate forged, I believed then and still believe Obama is a radical  muslim not born in this country and he is doing exactly what he was put into office to do--- destroy US economy.  He is doing a wonderful job-- too bad he is not working for the USA.
Jan 9, 2013 6:36PM
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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.)

Jan 9, 2013 6:36PM
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Wendy's don't have money to pay for employees medical care? I don't think so,They Charge more for a simple hamburger than Panda chinese.food.!! 
Jan 9, 2013 6:36PM
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Simple backlash...boycott the place.....
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