Jimmy John Liautaud, founder of Jimmy John’s Gourmet Sandwiches, told Fox Business News that he’s considering cutting employees’ hours down to 28 to avoid Obamacare’s requirement that employees who work 30 hours or more should be provided health insurance.
“We have to do that. There’s no other way we can survive it,” Liautaud said. “If you have 40 or 50 employees at a restaurant, and the penalty is $2,000, and you’re going to pay $80,000 or $100,000 penalty, there goes the profit in your restaurant.”
(Photo by Scott Olson/Getty Images)
Zane Tankel, CEO of Apple-Metro and the owner of 40 New York area Applebee’s franchises, has said that he won’t hire any more employees and he’s also admitted to considering cutting current workers’ hours or firing them as well.
“The model’s been set,” he told Fox Business News. “I don’t want to make any commitments one way or another. I want to simply say we are looking at it, we are evaluating. If it’s possible to do without cutting people back, I am delighted to do it, but that also rolls back expansion, it rolls back hiring more people, and in a best-case scenario, we only shrink the labor force minimally. Best case.”
(Photo by Spencer Platt/Getty Images)
Papa John’s CEO John Schnatter has said that the Affordable Care Act’s mandates will increase his business costs and he plans to cut employees’ hours as a result.
According to Naples News, Schnatter has told shareholders that Obamacare will result in a 10 to 14 cent increase in pizza costs for customers.
“That’s what you do,” he said. “You pass on costs. Unfortunately, I don’t think people know what they’re going to pay for this.”
Schnatter said he wants all of his employees on the company’s health care plan, but the rising costs of insurance make it difficult.
Denny’s is among 30,000 restaurants that are making kids’ menus healthier. (Photo by Justin Sullivan/Getty Images)
(Photos: RedLobster.com, OliveGarden.com)
Orland-based Darden Restaurants, which owns Red Lobster and Olive Garden chains, announced that it will put more workers on part-time hours to limit the costs of Obamacare.
According to CNBC, the change will only affect four markets for now. Bob McAdam, the head of government affairs and community relations for Darden, said the company is still learning from the test.
“We’re not at a point where we have results,” he said.
Darden operates over 2,000 restaurants in the United States and Canada, including LongHorn Steakhouse.
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Now that President Barack Obama has secured a second term in office, multiple food chain owners are pushing back against Obamacare.
Franchise owners of restaurants like Red Lobster and Olive Garden have promised to take drastic measures to ensure their properties avoid the costs that come along with providing insurance for their employees.
Obamacare, or the Affordable Care Act, requires businesses with more than 50 employees to provide an approved health insurance plan for each of them. If they don’t, businesses will be penalized $2,000 for each full-time worker over 30 employees.
Food chains employ more than 4 million full and part-time workers who make an average of $12,000 a year, and many of them do not fund health care for a majority of these workers.
Owners of these chains are now making plans to scale back their number of employees and cut hours to dodge Obamacare penalties.
Florida businessman John Metz, whose company, RREMC Restaurants, owns a number of Denny’s and Dairy Queen locations, told the Huffington Post that this is “the only alternative” because the cost of providing insurance is too high.
We’ve created a slideshow of franchise owners who have promised to make changes in light of Obamacare.
Click through the images above to see which food chains are cutting employee hours and more.
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