Zane Tankel, the CEO of Applebee’s New York Franchise, Apple-Metro, is so dedicated to not spending money on his employees that he’s refusing to hire anyone new. Why? Because he might have to provide them health care.
Under the Affordable Care Act, a business of 50 people or more must provide a health care option for its employees by 2014. The 40 Applebee’s restaurants in New York employ hundreds of people, and Tankel believes providing them with health insurance plans will be too costly. In an appearance on Fox Business News, the CEO said he won’t be able to hire new people because of the law, and even floated the idea of layoffs:
TANKEL: We’ve calculated it will be some millions of dollars across our system. So what does that say — that says we won’t build more restaurants. We won’t hire more people — exactly the opposite of what the President says.
HOST: Do you feel under pressure to move to a more part-time workforce, as other restaurants are doing because of Obamacare?
TANKEL: The model’s been set. I’m sure all our people are watching this right now, so I don’t want to make any commitments one way or another. I just want to say we’re looking at it, we’re evaluating it, if it’s possible to do without cutting people back, I’m delighted to do it. But that also rolls back expansion, it rolls back hiring more people, and in a best-case scenario we only shrink the labor force minimally.
It is virtually impossible that a company the size of Applebee’s will be able to avoid providing health care in the long-term — and it’s not really in their interest, either. Studies have shown that a company that provides health care has a higher retention rate for its employees, reports more employee satisfaction, and draws the best employees to the job.
And although providing his employees with affordable health insurance doesn’t seem to be a priority for Tankel, they likely have no other options when it comes to accessing health care. Many low-wage workers in the restaurant industry often don’t qualify for Medicaid because they earn salaries that are just barely over the threshold, but they also don’t make enough to be able to afford insurance on the private market.