October 9 2012
Food Service Workers Burned by Obamacare
Darden Restaurants Inc., which owns Red Lobster and Olive Garden, is a big supporter of Michelle Obama's Let's Move campaign. Last year, the company CEO stood shoulder to shoulder with the First Lady and annouced the chain's restaurants would reduce salt, fat, and portion sizes. Not surprisingly, six months later, the restaurant was struggling to find customers (What? People don't want to eat at restaurants that vow to serve tiny portions of bad-tasting food for the same price? Shocking!). Now, despite Darden's commitment to happily complying with Obama administration regulations, the restaurant corporation is getting burned by the White House and its costing jobs. Huffington Post reports:
The owner of Olive Garden and Red Lobster restaurants is putting more workers on part-time status in a test aimed at limiting costs from President Barack Obama's health care law.
Darden Restaurants Inc. declined to give details but said the test is only in restaurants in four markets across the country. It entails boosting the number of workers on part-time status, meaning they work less than 30 hours a week.
Under the new health care law, companies with 50 or more workers could be hit with fines if they do not provide basic coverage for full-time workers and their dependents. Starting Jan. 1, 2014, those penalties and requirements could significantly boost labor costs for some companies, particularly in low-wage industries such as retail and hospitality, where most jobs don't come with health benefits.
Darden, which operates more than 2,000 restaurants in the U.S. and Canada, employs about 180,000 people. The company says about 75 percent of its employees are currently part-timers.
Bob McAdam, who heads government affairs and community relations for Darden, said the company is still learning from the tests, which was first reported by the Orlando Sentinel.
"We're not at a point where we have results," he said. McAdam also noted that Darden is not alone in looking at ways to keep labor costs in check, with companies industrywide prepping for the new regulations to take effect.