Employees at the 40 Denny’s restaurants and five Hurricane Grill and Wings owned by John Metz now have fair warning: their hours are getting cut back in January of 2014.
To avoid having to provide health care for his employees, Metz — who owns restaurants in Florida, Virginia and Georgia — told Fox News today that he will cut back many of his workers’ hours to part time. At the same time, he’ll add a five percent “Obamacare surcharge” to his customers’ bills:
“Everyone’s looking for a way to not have to provide insurance for their employees. It’s essentially a huge tax on all us business people.”
To further offset the costs, Metz, who oversees roughly 1,200 employees as president and CEO of RREMC Restaurants, LLC, said he also will slash most of the staff’s time to fewer than 30 hours per week. That change will be announced to employees next month, he said. [...]
At Denny’s restaurants operated by Metz, the average check is $9, he said, meaning the ObamaCare surcharge if implemented would be 45 cents on that bill. At Hurricane Grill & Wings locations, where the average bill is $14.50, the surcharge would total 72 cents.
Metz is just one of a growing number of CEOs in the business sector who are trying to pass expensive health care onto their employees instead of simply providing the essential coverage that their workers otherwise couldn’t afford. The company that owns Olive Garden used Obamacare as an excuse to cut back hours for its employees, Papa John’s is following suit, and an Applebee’s franchise CEO threatened to fire people and enstate a hiring freeze because of the health care requirement.
Under the Affordable Care Act, businesses with more than 50 employees are asked to provide health care to their employees. If they do not, and their employees qualify and receive subsidized coverage in the exchanges established by the ACA, employers must pay a penalty. The policy, championed by Republican Sen. Olympia Snowe (R-ME), is designed to discourage employers from opting out of providing health coverage, and to ensure that they contribute to the system as a whole.
While Metz makes it sound like that requirement spells the end of business as usual, he might be pleasantly surprised by the positive effects of choosing to provide employer-based health care. Studies have shown that Obamacare will ultimately decrease health care costs for small businesses. On top of that, providing insurance coverage generally leads to higher retention rates, more satisfied employees, and a more competitive hiring market.