With the changes over the last year-plus to healthcare due to Obamacare rules, many businesses are struggling with healthcare costs.
Restaurants are particularly hard hit with the additional expenses because many of them fall within the limits imposed by the law.
However, they are finding ways to deal with the problem while keeping quality employees on-board and doors open.
Increasing Prices
Some restaurants are opting to increase their menu prices to pay for the additional expense of healthcare. However, the increase is not so high as to be unaffordable for the average consumer.
According to an article in The Huffington Post back in 2012, the CEO of Papa John’s said that pizza prices might raise 11 to 14 cents. While some restaurants might get criticized for price hikes, passing on costs is how businesses deal with new or increased expenses. Most people won’t stop eating out for such an incremental price increase.
Reducing Employee Hours
The more popular answer for many restaurants is to reduce the number of full-time workers they have and increase part-time help, this even though the following article shows that many employees and employers know there are at least 5 reasons it’s vital to have health insurance.
In an industry that is marked with part-time staff, this would not be that big of a challenge to many restaurants.
In addition, it might actually boost the economy because it’s not as big of a commitment to hire three or four part-time workers as it is to hire one or two full-time employees.
Darden Restaurants is one company that had these exact plans until it found out that it didn’t work for them.
Darden Restaurants operates Olive Garden and Red Lobster. The company received bad publicity and a decline in sales, according to an article that appeared in The Huffington Post in October 2012. This caused them to give up the plan and continue with full-time workers.
An article appeared in CNN Money about Fatburger and work-sharing, another option for some restaurants to avoid the new law.
The franchise was one of several that decided to experiment with the idea of hiring employees to work part-time at two separate franchises. This would keep them under the 30-hour per week threshold where employers are required to pay for healthcare while giving them full-time pay.
For instance, an employee might put in 25 hours at one franchise and then work another 20 or more hours with a separate franchise owner and neither one would have to pay for health insurance even though the employee was working more than 40 hours a week.
Some franchise operators are even closing locations to ensure they stay below the minimum 50 employees that require businesses to provide health insurance.
However, most restaurant owners are finding ways to either avoid the Obamacare law or to meet it and still stay open for business.
As with most laws that people don’t agree with or like, they will complain about it and then figure out a way to make it work.
About the Author: Joyce Morse is an author who writes on a variety of topics, including healthcare and finance.
Recent Comments