A local Wendy's franchise with 11 restaurants in the Omaha, Nebraska metro area is slashing about 100 workers' hours in order to avoid paying for employees' health benefits.
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.
Comments from Wendy's employees on an online petition site seem to indicate that local Wendy's restaurants in both Arkansas and Idaho are also making the move to reduce employee work time to under 30 hours a week.
"They could easily raise prices a few cents to cover their cost but instead they punish their poverty struck employees, while telling them they don't care about their health," wrote Alex Mitchell, who sponsored the petition.
If recent history is any indication, the local Wendy's franchise risks blowback from customers over their decision to slash hours. Anti-Obamacare rhetoric caused the brand perception of Papa John's and Applebee's to take a beating, while Denny's franchise owner John Metz was criticized by the company's CEO over his decision to institute an "Obamacare surcharge."
Under the Affordable Care Act, employers with more than 50 employees are required to offer health benefits to any employee who works more than 30 hours a week. As a result, some business owners have already begun reducing employee hours in order to avoid offering their employee's health care coverage.
In reality, the costs of the Affordable Care Act have been overstated and politicized. Not only does Obamacare only impose a small increase in health care spending for larger firms, it actually reduces health care spending for smaller employers.