Some Denny's restaurants to bill customers 5 percent 'Obamacare' surcharge
A Florida businessman who owns 40 Denny’s restaurants says he’s going to start tacking on an additional 5 percent charge to customers’ bills as a way to offset the costs of Obamacare.
John Metz is the owner of RREMC Restuarants which operates the Denny’s restaurants, 48 Hurricane Grill & Wings locations, and several Dairy Queen franchises. Obamacare, also known as 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.
Metz told the Huffington Post the cost of providing insurance is too high.
“Obviously, I’d love to cover all our employees under that insurance. But to pay $5,000 per employee would cost us $175,000 per restaurant and unfortunately, most of our restaurants don’t make $175,000 a year. I can’t afford it,” he explained.
As a solution, he’s passing the cost off on to customers.
“If I leave the prices the same, but say on the menu that there is a 5 percent surcharge for Obamacare, customers have two choices,” Metz told the Huffington Post. “They can either pay it and tip 15 or 20 percent, or if they really feel so inclined, they can reduce the amount of tip they give to the server, who is primary beneficiary of Obamacare.”
He added, “Although it may sound terrible that I’m doing this, it’s the only alternative.”
Metz said he’ll also cut hours for front-of-the-house employees and reduce them to part-time status. He’s hoping the changes will inspire his employees to take action.
“What we’re going to ask them to do is to speak to their elected officials, to try to convey what this means in terms of their jobs and their livelihoods,” he said.
Metz is not the first to announce drastic measures meant to avoid Obamacare costs. Zane Tankel, an owner of 40 Applebee’s restaurants, recently said he won’t hire any more workers and has considered cutting down the number of employees he has now.
The owners behind Olive Garden and Red Lobster and the owner behind Jimmy John’s Gourmet Sandwiches also have plans to cut their employees down to part-time hours to avoid insurance mandates.
John Arensmeyer, CEO and founder of Small Business Majority, a national small business advocacy organization, said it’s not productive to criticize Obamacare now that the election is over.
“It’s the law of the land,” he said. “And there’s no chance it’s going to be repealed after the re-election of the president and the Supreme Court decision earlier this year, and we think it’s time for all businesses to come together and figure out how to make this work.”
Follow Ugonna on Twitter at @ugonnaokpalaoka