Wendy’s Franchise Cuts Employee Hours To Part-Time To Avoid Obamacare
An opponent of Barack Obama's healthcare legislation demonstrates in Washington, DC in 2011. On the campaign trail frontrunner Mitt Romney regularly calls for an end to "Obamacare".
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Not long after the owner of the Olive Garden and Red Lobster chains admitted their anti-Obamacare campaigns hurt more than helped, the owner of a Wendy’s franchise in Omaha, Nebraska plans to cut 300 employees’ hours to part-time to avoid providing them health care coverage.
By moving workers to part-time status in order to avoid paying for their health benefits, the Wendy’s franchise would shift the costs of insurance coverage onto hundreds of employees:
The company has announced that all non-management positions will have their hours reduced to 28 a week. Gary Burdette, vice president of operations for the local franchise, says the cuts are coming because the new Affordable Health Care Act requires employers to offer health insurance to employees working 32-38 hours a week. Under the current law they are not considered full time and that as a small business owner, he can’t afford to stay in operation and pay for everyone’s health insurance.
But anecdotal evidence suggests this strategy may backfire on the Omaha Wendy’s operations. This fall, Denny’s quickly distanced itself from a franchisee’s similar ploy, while Darden Restaurants saw a sharp 37 percent drop in profit after threatening to cut workers to part-time.
Heaping blame on Obamacare may be a popular tactic among the fast food industry, but it is a misleading one. According to the Urban Institute, Obamacare has a negligible impact on business costs, leaving large companies virtually unaffected while actually reducing costs for small businesses.