Full time employees have been dropped back to part time hours so that the franchise won’t have to cover them.
It has been revealed that an Omaha, Nebraska owner of a Wendy’s franchise has the intention of slashing the hours of 300 full time employees in order to make them part time workers so that the company can avoid having to provide them with health insurance as required by the Affordable Care Act.
The franchise is not required to have to provide part timers with medical benefits, which explains the move.
This places the weight of the required health insurance coverage on the shoulders of the 300 employees who are now also having to face reduced hours and, therefore, lower incomes. The Wendy’s franchise in Omaha has announced that all of the full time positions that are non-management status will have their hours slashed back to 28 per week.
Other companies that have made similar moves to dodge health insurance benefits have faced considerable backlash.
The franchise’s vice president of operations, Gary Burdette, has stated that the reason the location has cut the hours is because the new healthcare reforms require employers to provide health insurance benefits to all employees who work between 32 and 38 hours per week. The current law does not consider them to be full time workers and, he stated, as a small business owner, he would not be able to afford this coverage and still remain in operation.
That said, other companies that have made similar moves have admitted that those were considerably more harmful than beneficial. The owner of a Red Lobster franchise and the owner of an Olive Garden franchise both took on similar campaigns against the Affordable Care Act and experienced dramatic backlash from the community. They were essentially boycotted by a massive number of people in the local area.
Similarly, last fall, the corporate office from Denny’s took rapid steps to place a distance between itself and one of its franchisees that had made a similar move to try to skirt the requirement for paying for employee health insurance benefits. A 37 percent decrease in profits was experienced by Darden Restaurants when they announced their intentions to cut their employee hours to part time. In this particular case, though, the corporate offices at Wendy’s has yet to respond to the cost cutting moves made by Burdette.