Wendy’s Franchise Cuts Employee Hours To Part-Time To Avoid Obamacare

[warrior1]

http://thinkprogress.org/health/2013/01/07/1409841/wendys-obamacare/

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 with 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.

snip

fuckers

[Hekate]

1. Is that just Omaha or is it corporate policy?

That will have an influence on whether I decide to boycott our local Wendy's or not. It just may be one rogue franchisee, in which case corporate HQ should be put on notice that they need to rein the jerk in because it will harm their brand if they don't.

[SoCalMusicLover]

6. Sounds Like A Franchise

Which means it's the owner of that particular location who is making the rules. Wendy's corporate probably would issue a statement saying they have no control over the actions of a particular franchisee. But undoubtedly, this would have an impact nationwide, once word gets out.

[MADem]

57. Just the one idiot.

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.

[lame54]

2. 300 employee's?

[RomneyLies]

10. Probably has several stores

I know around me all of the Wendy's are owned by one guy.

[Tempest]

27. It's a franchise. Most franchise owners have more than one store.

All the Jack in the Box's in my city are owned by the same family.

[BlueStreak]

53. A typical MacD has over 100 employees

Wendy's is lower volume per store. But this is just more right wing BS. Probably 80% or more of their employees were part-time already and they won't be making the managers and assistant managers part-time if they have any brains.

[SoCalMusicLover]

3. I Hope Word Gets Out About This Location

Maybe when their business drops off, they can find some excuse to blame it on.

[leftstreet]

4. Why didn't Obamacare address this?

no one could have predicted...

[lynne]

24. This isn't anything new -

- employers went to "part time preferred" several years ago, when the economy began going downhill. I know as I was laid off from my full-time job and would not even get a call-back if I put I wanted full time on an application. I finally got a part-time job and part-time jobs are the majority of what's hiring out there.

Reducing employees to part-time eliminates not only Obamacare but also bonus plans, sick leave, and vacation benefits. It's certainly seems to be a sign of the times.

[leftstreet]

29. So Obamacare ignored the reality of the workplace

how odd

[xfundy]

59. Bullshit.

[1StrongBlackMan]

5. Ermmm ...

Mr. Burdette, vice president of operations for the local franchise, maybe before you make a business decision, you might wish to consult with someone that knows something about the law ... specifically, you might ask about the exemptions for small businesses, i.e., businesses with less than 50 employees.

And if you fall outside of that exemption, maybe you should consult with your Priest/Pastor/Clergy-person about humanity.

[ChisolmTrailDem]

15. The article excerpt right in the OP states that the company in question

has 300 employees.

[1StrongBlackMan]

61. Then ...

A call to his Priest/Pastor/Clergy-person might be in order.

[gopiscrap]

51. No shit!

[Systematic Chaos]

7. Don't worry about it. They're about to destroy their business with a one-two punch.

Completely fucked morale + spike in turnover = horrible product and service.

Bye-bye Wendy's franchisee. It's been nice knowing ya.

[Vinnie From Indy]

8. 300 employees?

Something is fishy about this story.

Cheers!

[gcomeau]

9. I'm guessing multiple stores... -eom

[DogPawsBiscuitsNGrav]

11. There may be several thousand companies planning on doing this that we haven't heard

about. If they all start doing it, we obviously can't boycott them all and cutting employee hours could be the final nail in the coffin of the economy. This could get really ugly if minimum wage workers are forced to pay hundreds of dollars a month out of their own 28 hour a week pay checks.

Does anyone know if there was a back up plan for this situation?

[Ikonoklast]

12. Yes, the businesses that have been doing it then see that their help quits in droves,

leaving the dumbass employer up shit creek without a paddle.

They then have to do an emergency hire to fill the vacant slots, all the while losing business as their service goes down the tubes.

Many quietly rescind their public bloviating soon after discovering they just shot themselves in the foot.

Some had to do it publicly, like Darden.


But, keep up with the Concern Posting!

I see you are totally ignorant of the provisions of the ACA and where low-income employees fall under the provisions of that law.

No one making minimum wage will have to pay 'hundreds of dollars a month' out of their paychecks for health care.

[DogPawsBiscuitsNGrav]

13. Yes, I'm totally ignorant. That's why I asked the question. I don't make minimum wage but

was concerned for those who do. That's a big concern when the economy is such that the employers can afford to throw away hardworking people and have 100 other people lined up happy to have 28 hours. You might not want to admit it, but there are still a lot of people lined up waiting for any kind of job.

Since you're familiar with the ACA provisions, please tell me how much a person working minimum wage, 28 hours a week will be required to pay for their insurance? If they don't have to pay anything I'll be pleased. If they're stuck paying something because their employer forced them to 28 hour work weeks, that's not rainbows and roses in my book.

[Ikonoklast]

20. People were NOT lining up for those jobs. Why do you think those employers had to cave in?

Darden thought the same thing, let 'em quit, the economy sucks, people will come begging for these jobs, even at 28 hours a week and no benefits whatsoever.

Boy, were they ever wrong. They made a huge mistake, and it has cost them dearly.



Here's a good calculator put out by Kaiser for seeing who will pay what, based on family size and income level.

http://healthreform.kff.org/SubsidyCalculator.aspx

A single person aged 21 making 16K a year (139% of poverty level) will pay around $11 a week after the government subsidies for health insurance premiums.

That would be around less than half of what the employee contribution was to the previous employer-run plan under Darden, which I am familiar with.

I think they changed since then, so I'm not sure what their plan is now, but I'm going to guess and say it is more than an eleven bucks a week employee contribution.

[DogPawsBiscuitsNGrav]

22. I thought they caved due to bad press and being boycotted. I had no idea no one wanted those jobs.

Thanks for the reply. I'm trying to get my brain wrapped around this. Are you saying that the minimum wage employees will only have to pay 11 dollars a week for health care if their employer refuses to cover them? If so, that's fantastic! But it's still 44 dollars a month and that's going to be very hard on them with cuts to their hours.

My next question is

Couldn't the employers get health care for these employees for that same 44 dollars a month? If so, anyone who cuts these poor peoples hours over 44 dollars a month is just a really sad example of a human being.

[Ikonoklast]

37. Not really. The employers also have to deal with the paperwork, dealing with the insurer,

taking out the empoyee contributions, and bunches of other crap that most people never even think about, but it does cost the employer money and manpower to deal with. One more cost to the corporation, and that one they have little control over.

And don't forget, that 45-50 bucks a month is only that low because of the subsidies and the exchanges that will be set up. Employers would have a difficult time matching those numbers due to the subsidies.

The health insurers have been sticking it to employer side of the issue all along just as much as they've sticking it to the rest of us, making them scramble to keep finding health insurance that was affordable for both the employer to offer and the employees to contribute to, without breaking the bank on both sides.

I can see the employers side, most of them don't want to be dealing with the health insurance business in any way, they would much rather push all of it off onto the government...they just won't come out and say so, BUT...

They don't want to be taxed for their part of the health care contribution for their employees, either.

That's the problem.

It's coming anyway, the ACA is just the first steps in the right direction. Employers will fall in line when they see that it will actually lower their costs, after all is said and done.

[Tempest]

30. The situation of business owners acting like dicks?

The fact is, analysis after analysis shows there is no big increase in costs from the health reform act.

This is nothing more than unmitigated fear and loathing of a black president on their part.

[notadmblnd]

44. any single person age 20 making under 15,250 per year will qualify for medicare and pay 0 dollars

[Fumesucker]

14. I just heard of a local Pizza Hut doing this

Just before New Year's eve someone I know working at Pizza Hut mentioned to me that all employees were going to be cut to under thirty hours.

[DogPawsBiscuitsNGrav]

18. I'm hearing the same. I personally know a few business owners who are already starting to cut

hours on their employee's due to the new health care law. I'm not reading about them in the news so I'm wondering how many business's are going to be using this loophole that we aren't hearing about.

[loyalsister]

16. They are lying

This is nothing new. People working jobs that pay minimum wage have been in this position forever. Thus many Walmart employees are on medicaid. I would like to see a survey count of fast food workers who currently work full time and have health insurance.

[Fumesucker]

19. Now they are even cutting back management I gather

I was talking to a Pizza Hut manager I know just before New Year's Eve and she told me all employees were getting cut below thirty hours.

In today's business environment if they can save a hundred bucks a year by ruining your life hey it's just business, nothing personal you understand.

[BWC]

17. I used to work for a Darden restaurant

They cut everyone down to less than 30 hours. Obamacare is not going to be easy to implement that's for sure

[stultusporcos]

21. We have the power to stop this nonsense

Stop eating corporate food.

[Tempest]

33. Way ahead of you.

Stopped decades ago.

I only eat at single owned family businesses when I eat out.

The food is so much better and healthier for you than from any corporate based restaurants which cost cutting is their only objective.

[stultusporcos]

43. Same with me but only about 10 years ago

for fast food, corporate restro's, I have not eaten in one since the early 90's as we used to say I got the beaucoup shi*$ from it the last time I had corporate food I stopped all together.

Local places, local food only now.

[Tempest]

46. It was an Arby's in Denver that got me to stop

Was sick in the hospital for days, along with a couple of dozen other people who ate there.

[Skip Intro]

23. The question for me is, is the company right that it would go out of business

if it had to pay employees' health insurance?

Is that true?

[PoliticAverse]

32. If a company chooses not to offer its employees health care they may have to pay $2,000 per employee

as a penalty. For an explanation of what the employer must do and what they might owe, see:

See: http://www.irs.gov/uac/Newsroom/Questions-and-Answers-on-Employer-Shared-Responsibility-Provisions-Under-the-Affordable-Care-Act

[Skip Intro]

34. That doesn't answer the question I asked.

This is a new cost for many companies.

Is the vp of this franchise chain correct when he says the new financial burden would cause the company to cease being operational?

Would paying his employees' mandated health insurance costs cause the company to go out of business?

Is that true?

[Ikonoklast]

45. Unless the franchise owner provides proof of his financial status, there is no real way to know.

I'll go out on llimb here and say he won't do so if asked to provide a profit/loss projection based on current sales numbers with any new health insurance burdens added.

Employers will seldom, if ever, do it when pressed, you're just supposed to take their word for it how bad they are doing, especially privately held corporations.

I am sure that it will cut into his profit margin, and that is the first thing to be protected.


Heard the same boo-hooing at every new contract negotiation, every three years, "We're going broke, you guys are killing us, we can't give you a raise, we can't afford healthcare!"

So we said, "Show us the books, we don't want to run you out of business, we have a vested interest here to see that you succeed, too."

The answer was always. "Hell, no! That's none of your business!"

So, we never took them at their word without any proof, either.

Show your numbers, or shut up.

[seabeyond]

40. record profits. all they have to do is add a nickle to the burgers.

corps use to do these things and survive. absorb it into the company. not as high profit. it works.

[Sez Eye]

50. The numbers I saw

for raising the minimum wage and paying the increased costs of obamacare indicated that the cost of the food would have to more than double. Who would pay $10 for a big mac?

[seabeyond]

52. oh bullshit. fuckin stupid and you went for a post how old? go away. nt

[alphafemale]

25. Keeping low wage employees part time isn't anything new.

Blaming this on Obama is the latest MSM horseshit.

Been going on 30 years at least.

[LisaLynne]

35. Exactly.

Every time minimum wage was raised (or even if it was just mentioned) businesses start crying about how they are going to have to fire people, lay people off, they can't afford it, you see! They will be destroyed - DESTROYED - if they have to spend one more cent on workers.

[Xipe Totec]

26. Xipe Totec cuts Wendy's out of is menu to say "fuck you"

[PoliticAverse]

28. The following IRS webpage explains employer's responsibilities under the ACA and the 30 hour issue..

http://www.irs.gov/uac/Newsroom/Questions-and-Answers-on-Employer-Shared-Responsibility-Provisions-Under-the-Affordable-Care-Act

[1StrongBlackMan]

38. So based on the IRS link ...

Mr. Cut Cost on the Back of Employees, expects to reduce the hours of his non-management employees to less than 50 FTE (with 300 employees) ... that would mean his work force would be limited to about 6 hours/week. I'm thinking he did not think that out well.

[Travis_0004]

54. I don't think so.

They need to have less than 50 full time employees. So having 49 full time employees, and 251 part time employees would allow them to get around the regulations, which shouldn't be difficult to do.

[1StrongBlackMan]

62. No ...

it's based on FTEs (i.e., two workers, working 4 hours per day equals one FTE) ... so your formula wouldn't work, either.

Bottom-line ... this guy is making a Business decision, based on Political ideology; that rarely works well.

[Initech]

31. Remember it's not the company itself - just another asshole franchise owner.

Still doesn't discount them as blood sucking leeches though.

[julian09]

36. He is expanding his stores, by denying his workers benefits and health ins.

He is expanding on the backs of his employees, they should organize all his franchises.
Who can live on 28 hours a week.

[1StrongBlackMan]

39. With 300

employees, 28 hours is more than 50FTE. He ain't gonna get to his exemption number.

[Epiphany4z]

41. my aunt works for the city

she is being cut 9 hrs a week..... she says to avoid having to offer her insurance....though her hubby has the family on his policy..so...who knows. I don't see this working out to well for very wrong because business will have to hire extra people to fill the gaps and hell I got most my hours last year because people called off and quite all the time...I was supposed to be very part time but that is not how it worked out at the end of year.

[seabeyond]

42. i sent my email.

I understand you are cutting employees hours back in order to avoid having to invest in the employee thru the obama health care. I will not be using you business any longer. Already you pay minimum wage. Corporations are making greater profit than ever before. And yet, you are willing to go after the employee than absorb some of the cost and add another nickle to the hamburger. I wont use your chain any longer. You are about a quarter of a mile from my home. And i will be sure to let my teenage boys know about your anti employee plan to ensure they do not give any of their money to you. That would include letting their friends know why wendys is not a choice, during lunch hours. I imagine you will end up losing the money that you think you will save. Dishonesty, lack of integrity cannot win.

[muntrv]

47. Do you want the person handling your Big Classic to be without health insurance?

[davidn3600]

48. Having worked for Wendy's in the past, this is nothing new for it or the industry

Majority of the workers are part-time in the service jobs.

Many of these places (especially food service) operate labor percentages by the hour. In other words corporate says you can only have a certain percentage of revenue every hour going to labor. If you are a manager and over this percentage, you have to cut hours.

When your business stays within the percentages, you make profit. That's how these places do business.

[Liberal_in_LA]

49. another restaurant to avoid

[dem in texas]

55. Yes, Don't give Wendy's your money

When I hear about a store that is cutting employees back to part-time to keep from offering them medical insurance, that is a store I will not give my money to.

[diabeticman]

56. Well I use to love eating their food but like my wife and I have done with so many other food places

YOU don't support your workers you don't get our business.

Wonder what Dave Thomas would think of this.

[BlueStreak]

58. Wendy's corporate has a customer service number at (888)-624-8140

They need to hear how the actions of one asshole with a franchise is going to hurt their whole system. Force them to make a public statement condemning this franchisee's actions and statements.

[xfundy]

60. But seriously, we know the shit they sell is harmful to us and our families.

Stopping at a fast food place used to be an occasional thing, a treat full of grease, sugar and fat. Today, it's become a staple "food," with many ingesting that garbage five days a week, if not more.

It's not that hard to make real food at home, and really doesn't take much time. Got a crock pot? http://www.crockpot365.blogspot.com.

Of course, our food supply has been poisoned by corporate farming, etc., but at least we don't have to eat food that's been poisoned even beyond that.