Darden Restaurants Inc., which owns the Red Lobster and Olive Garden chains, announced that it will experiment with shifting more workers to part-time status due to impending health benefit requirements under Obamacare.
Starting in 2014, Obamacare requires firms with 50 or more full-time workers to offer these employees basic health benefits or risk paying a fine. While studies have shown that Obamacare only modestly increases health care spending for large firms — while actually reducing it for smaller employers — that has not stopped some large employers from painting Obamacare as a burdensome bogeyman. As ABC/WJLA reports:
In fact, Paul Keckley, executive director of the Deloitte Center for Health Statistics, noted that follow-up legislation might be needed to ensure that companies do not shift more workers to part-time status to avoid providing coverage.
“There’s not a company in those industries that aren’t looking at this,” Keckley said.
This summer, for example, McDonald’s Corp. Chief Financial Officer Peter Bensen noted in a conference call with investors that the hamburger chain was looking at the many factors that will impact health care costs, including its number of full-time employees.
Employers have long looked to shift the cost of medical coverage onto their employees by cutting benefits, increasing required worker contributions to health plans, and other unsavory tactics such as Darden’s experiment in shifting workers from full-time to part-time status — a change that legally only requires a 10-hour per week reduction in hours worked. This is also not the first time that Darden has engaged in anti-labor practices. The firm was recently sued by a labor activist group for circumventing the federal minimum wage by paying workers a “tip credit wage” as low as $2.13 per hour.
Darden’s latest tactic is another example of employers prioritizing profits over employees’ satisfaction and well-being. Preventing employers from engaging in this kind of benefit-dodging is an example of a worker and consumer protection that could supplement Obamacare. Without such protections, large corporations in particular might use the landmark reform law as a convenient excuse for providing less worker benefits and protecting their bottom lines.