Tag Archives: Darden Restaurants

Americans in shock as businesses cut work hours and health benefits because of Obamacare

elections have consequencesDo you remember then-House Speaker Nancy Pelosi calling on Americans to support the massive Obamacare bill that no Congress critter had actually read, saying that “we must pass it to find out what’s in it”?

Every day since the passage of that monstrous piece of legislation, we are finding out exactly “what’s in it.” Increasingly, more and more Americans have discovered that the Affordable Care Act is not just unaffordable, but is costing them dearly, as work hours are slashed to part time and spouses are slashed from their company’s healthcare coverage.

As examples, in October 2012, Orlando-based Darden Restaurants stopped offering full-time schedules to many hourly workers in some  Olive Gardens, Red Lobsters and LongHorn Steakhouses. The next month, Pennyslyvania’s Community College of Allegheny County slashed instructors’ hours to avoid Obamacare. In April 2013, citing Obamacare, Regal Entertainment Group, the biggest U.S. movie theater chain cut its employee hours; followed in July by an Indiana hospital chain, St. Vincent Health, firing 865 employees because of Obamacare.

Here are the latest:

Forever 21

1. Forever 21

Three days ago, a leaked memo from the clothing boutique chain Forever 21 revealed that beginning August 31, the company is reducing its employee hours to part time. In so doing, those employees will also lose medical, dental, vision and voluntary coverage.

William Bigelow reports for Breitbart.com that the company released a statement on Facebook claiming that “less than 1% of all U.S. store employees” would be affected. Although the company insists that the cuts are not due to Obamacare, it is being disingenuous because the company is cutting its employee hours to a maximum of 29.5 a week—a fraction less than the 30 hours a week designated by Obamacare as full-time employment. This allows Forever 21 to sidestep the law’s requirement for companies who employ 50 or more workers to provide health insurance coverage for full-time employees.

Strangely, instead of blaming Obamacare, some consumers are blaming Forever 21. As examples, see here, here, and here.

2. University of Virginia

Bob Schilling reports for BearingDrift.com that the University of Virginia (UoV) announced today that due to “rising health care costs,” starting January 1 next year, working spouses who have access to coverage through their own employer, will be ineligible for UoV insurance coverage.

The University blames Obamacare for an anticipated $7.3 million cost increase next year, which doesn’t include the millions more in Obamacare taxes that punish the university for its “generous” employee health care offerings.

3. UPS

Bizjournals.com reports that UPS or United Parcel Service Inc. plans to remove 15,000 spouses from its medical plan because they are eligible for coverage elsewhere. The Atlanta-based logistics company points to the Affordable Care Act or Obamacare, as a big reason for the decision, reports Kaiser Health News.

In a memo to employees, UPS says that rising medical costs, “combined with the costs associated with the Affordable Care Act, have made it increasingly difficult to continue providing the same level of health care benefits to our employees at an affordable cost.” As a result, 15,000 working spouses of UPS’s workers, who are eligible for coverage by their own employers, will be excluded from the UPS health plan in 2014.

4. Businesses in Charlottesville, VA

Paul Bedard reports for the Washington Examiner that Obamacare has forced many firms in Charlottesville, VA, to switch to part-time workers, according to an online memo to investors by David John Marotta and Megan Russell of Marotta Wealth Management, an influential money management team.

The memo says, “Economic self-defense has many firms forcing their employees to work less than 30 hours a week regardless of their preference or availability. This trend seems to be universal even here in Charlottesville.”

One manager was told he’d be fired if he hired a 50th full-time worker, the number that triggers the costly Obamacare system. Going over 50 means firms will either have to start offering health insurance or pay a significant fine.

5. Other U.S. companies

Charlottesville, VA is not alone. Dan Mangan reports for CNBC, Aug. 21, 2013, that a survey by Towers Watson of 420 American mid- and large-sized companies finds most are envisioning changes to their employees’ health insurance offerings so as to control employee-related health costs that are expected to increase under Obamacare.

Nearly 60% of the companies—which collectively employ 8.7 million people—are considering shifting the work of insuring their workers off from the company plan to private health insurance exchanges. The same companies also are increasingly unlikely to offer their employer-sponsored health plan for retirees older than age 65, off-loading them to Obamacare state insurance exchanges and Medicare.

See also:

~Eowyn

College slashes instructors’ hours to avoid Obamacare

What a surprise!

No matter the machination of Big Government, Americans have a mind of our own and will do what we need to preserve our self interest.

That is exactly what businesses across America are doing — slashing their employees’ hours and firing them altogether, in order to avoid the juggernaut called Obamacare that’s coming their way. As an example, last month Orlando-based Darden Restaurants stopped offering full-time schedules to many hourly workers in at least a few Olive Gardens, Red Lobsters and LongHorn Steakhouses.

The latest is a Pennsylvania community college that’s slashing its already low-paid instructors’ hours to avoid Obamacare.

Wynton Hall reports for Bretibart.com, Nov. 21, 2012:

Pennsylvania’s Community College of Allegheny County (CCAC) is slashing the hours of 400 adjunct instructors, support staff, and part-time instructors to dodge paying for Obamacare.

“It’s kind of a double whammy for us because we are facing a legal requirement [under the new law] to get health care and if the college is reducing our hours, we don’t have the money to pay for it,” said adjunct biology professor Adam Davis.

On Tuesday, CCAC employees were notified that Obamacare defines full-time employees as those working 30 hours or more per week and that on Dec. 31 temporary part-time employees will be cut back to 25 hours. The move will save an estimated $6 million.

“While it is of course the college’s preference to provide coverage to these positions, there simply are not funds available to do so,” said CCAC spokesperson David Hoovler. “Several years of cuts or largely flat funding from our government supporters have led to significant cost reductions by CCAC, leaving little room to trim the college’s budget further.”

The solution, says United Steelworkers representative Jeff Cech, is that adjunct professors should unionize in an attempt to thwart schools seeking similar cost-savings efforts from avoiding Obamacare. “They may be complying with the letter of the law, but the letter of law and the spirit of the law are two different things,” said Mr. Cech. “If they are doing it at CCAC, it can’t be long before they do it other places.”

Under the new CCAC policy, adjunct professors will only be allowed to teach 10 credit hours a semester. Adjuncts are paid $730 per credit hour.

“We all know we are expendable,” said Mr. Davis, “and there are plenty of people out there in this economy who would be willing to have our jobs.”

I can’t help but wonder how many of Community College of Allegheny County’s instructors, whose hours are now cut, had voted for Obama on Nov. 6?

~Eowyn

How’s that Obamacare going to work for you?

Darden tests limiting worker hours as health-care changes loom

Orlando Sentinel: In an experiment apparently aimed at keeping down the cost of health-care reform, Orlando-based Darden Restaurants has stopped offering full-time schedules to many hourly workers in at least a few Olive Gardens, Red Lobsters and LongHorn Steakhouses.

Darden said the test is taking place in “a select number” of restaurants in four markets, including Central Florida, but would not give details. The company said there has been no decision made about expanding it.

In an emailed statement, Darden said staffing changes are “just one of the many things we are evaluating to help us address the cost implications health care reform will have on our business. There are still many unanswered questions regarding the health care regulations and we simply do not have enough information to make any decisions at this time.”

Analysts say many other companies, including the White Castle hamburger chain, are considering employing fewer full-timers because of key features of the Affordabel Care Act scheduled togo into effect in 2014. Under that law,large companies must provide affordable health insurance to employees working an average of at least 30 hours per week. If they do not, the companies can face fines of up to $3,000 for each employee who then turns to an exchange — an online marketplace — for insurance.

I think a lot of those employers, especially restaurants, are just going to ensure nobody gets scheduled more than 30 hours a week,” said Matthew Snook, partner with human-resources consulting company Mercer.

Darden said its goal at the test restaurants is to keep employees at 28 hours a week. Analysts said limiting hours could pose new challenges, including higher turnover and less-qualified workers. “It’s a real problem for restaurants,” said Howard Penney, a restaurant analyst and managing director for Hedgeye Risk Management.

Darden, the world’s largest casual-dining company and one of the nation’s 30 largest employers, said it offers health insurance to all its approximately 185,000 employees. Many are offered a limited-benefit plan. That type of coverage is being phased out under health-care changes, which will ban annual limits for most plans.

About 25 percent of Darden workers are full-time, meaning they work more than 30 hours a week. Though employees say Darden already offers traditional health insurance to full-timers, Janney Capital Markets analyst Mark Kalinowski said the cost of providing that could become higher for Darden under the Affordable Care Act. Because that law requires everyone to have health insurance, more workers will likely choose its coverage, Kalinowski said. “Even a modest jump up in the amount of employees that decide they want the insurance you’re offering could have a meaningful impact on your bottom line,” he said.

Under the system Darden is testing, employees are to be scheduled for no more than 28 hours each week. They can run over that if things get busy, but Darden acknowledged they are not supposed to exceed 30 hours.

At a new Olive Garden in Stillwater, Okla., former busboy Keaton Hasty said employees were routinely limited to 29 1/2 hours. “It was 29 1/2, and they’d kick you out,” said Hasty, a college student who now works at a pharmacy. “They’d always print off a little slip every day and say who was getting close.”

And Michael Walker said when he applied for a job at a new Olive Garden in Hammond, La., he was told that except for a few “key training positions,” only part-time jobs were available for hourly workers. “Without having full health care … I don’t see that as an option,” Walker said. He decided to stick with his current job at another restaurant.

Darden told analysts last year it would consider changing its mix of part-time and full-time employees to reduce costs. Darden has been aggressively keeping labor costs down. It has cut bartenders’ pay and required servers to share tips with them. It also has eliminated busboy positions at Red Lobster and reduced the number of servers working each shift at that chain. Labor costs as a percentage of sales have dropped steadily from 33.1 percent in fiscal 2010 to 30.8 percent in the most recent quarter.

If I understand correctly, Darden Restaurants received a waiver from Obamacare last year, one that exempts them fromsome of the most stringent mandates of ObamaCare. The law eventually outlaws “mini-med” plans to offer low benefit levels to low-wage employees. But companies can keep their mini-med plans if they can show that they couldn’t afford to comply with the law. Darden and other waiver recipients will be allowed to keep offering their employees minimal insurance benefits, while competitors without a waiver will need to offer more generous medical plans.

And this is the problem when you have big government telling you how to run your business, one that affects your bottom line. Employees will end up losing hours/money as a result of Darden having to make cuts to meet profit goals and answer to their stockholders. Instead of having a limited-benefit plan, employees will have no plan. Well, they’ll have Obamacare. And a smaller paycheck.

DCG