A Wendy’s franchise owner in Nebraska has decided to cut hours specifically to avoid having to offer an employer sponsored health insurance plan to many of his workers. The owner feels that he cannot afford to provide health insurance to all of his employees and still stay in business. Typically, owners of restaurants that make this type of announcement face public backlash.
Starting in 2014, a portion of the Affordable Care Act will begin. It will require businesses to offer an affordable health insurance plan to all full-time workers. Those that choose not to do so will have to pay a fine.
Gary Burdette is the Vice President of Operations for a Wendy’s franchise in Nebraska. His franchise covers 100 Wendy’s restaurants. He is the one who made the decision to cut hours in his restaurants.
To be clear, this decision is not one that is being handed down from the corporate headquarters of Wendy’s restaurants. It is a decision made by one franchisee in one state. That being said, I expect that many people will not differentiate between the decisions made by one Wendy’s franchisee and the entire chain of Wendy’s restaurants.
Franchisee Gary Burdette announced that all non-management positions will have their hours reduced to 28 a week. He said that the cuts to hours are coming because of the Affordable Care Act requirement that states that employers must offer health insurance to employees who have between 32 and 38 hours per week.
Right now, workers who receive between 32 and 38 hours per week are not considered to be full time. Gary Burdette says that as a small business owner, he can’t afford to stay in operation and pay for everyone’s health insurance. So, he decided to cut his worker’s hours down to 28.
Perhaps he is unaware that small businesses, those with fewer than 100 employees, will be able to use the health insurance exchanges to find affordable health plans for their workers. The exchanges will be ready in 2014, the same time as the law that Gary Burdette is trying to avoid complying with.
I don’t know exactly how many employees Gary Burdette has. If it is more than 100, then his Wendy’s franchise is not, technically, a small business.
This is very similar to a pilot program that Darden Restaurants put into place. They cut workers down to 28 hours, specifically to avoid having to offer the workers an employer sponsored health plan. The program has now ended, after much public outcry.
Personally, I wouldn’t want to eat food from a restaurant where the workers don’t have access to health care. Uninsured workers cannot afford to see a doctor when they are sick, and frequently end up coming into work while they are sick (and potentially contagious). Keep in mind that this is flu season.
Image by El Gran Dee on Flickr