11 Nebraska Wendy’s cut employee hours allegedly to avoid Obamacare

The phrase “heartless bastard” comes to mind. Though it might also be “opportunistic bastard.” A local Wendy’s franchise is reportedly drastically cutting hours for around 100 employees in order to skirt health care reforms new requirements to provide health care for full-time employees. So a number of Wendy’s are simply making full-time employees part-time employees, and voila! No more health care! (Oh yeah, and the blue collar employees lose a good chunk of their income. Oh well.)

From WOWT in Nebraska:

The company has announced that all non-management positions will have their hours reduced to 28 a week. Gary Burdette, Vice President of Operations for the local franchise, says the cuts are coming because the new Affordable Health Care Act requires employers to offer health insurance to employees working 32-38 hours a week. Under the current law they are not considered full time and that as a small business owner, he can’t afford to stay in operation and pay for everyone’s health insurance.

Wendy’s is in good company. There was the local Denny’s franchisee who came up with the bright idea of tacking on a 5% surcharge to every check to supposedly pay for Obamacare. Or the Applebee’s NY franchisee who claimed Obamacare may force him to institute a hiring freeze. Lots of whiners out there, considering that most of Obamacare hasn’t even been implemented yet. One wonders if this isn’t just a convenient excuse to milk the employees for even more savings at the employees’ expense.

I’m also curious if the national Wendy’s corporation has anything to say about how its franchises treat their employees, especially in cases like this?

(H/t ThinkProgress)

Follow me on Twitter: @aravosis | @americablog | @americabloggay | Facebook | Instagram | Google+ | LinkedIn. John Aravosis is the Executive Editor of AMERICAblog, which he founded in 2004. He has a joint law degree (JD) and masters in Foreign Service from Georgetown; and has worked in the US Senate, World Bank, Children's Defense Fund, the United Nations Development Programme, and as a stringer for the Economist. He is a frequent TV pundit, having appeared on the O'Reilly Factor, Hardball, World News Tonight, Nightline, AM Joy & Reliable Sources, among others. John lives in Washington, DC. .

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38 Responses to “11 Nebraska Wendy’s cut employee hours allegedly to avoid Obamacare”

  1. MikeB81 says:

    What are you talking about? For the record….none of these Wendy’s employees who’s hours were reduced, were ever full time….nor did they have benefits. The only thing that the franchise did was cut the already part time employees hours, to fall in line with the new guidelines set by Obama Care. The article was wrong and misreported when it said that 300 employees would have their hours and benefits cut. Only 100 part time employees had their hours cut…..so that they would remain part time employees. No employee that currently had medical had it taken away. The way it sounds here is that none of you have ever owned a small business, nor have the slightest ideal of how it works. Try adding four or five thousand dollars (cost per person) times 100 employees to your budget, when the only thing people are buying is 99 cent value meal items. See how long you’ll be in business! This is a small business with a handfull of stores, just trying to stay in business in a bad economic time.

  2. Goodwill employee says:

    In sacramento ca all the goodwills did what wendys did we make 8 dollars with no chance of a raise but get this they wont admit it and they offer employee nothing but yet the company makes a profit of over a million ea year they have never did right for the workers so there goes my chance for health care do I eat pay my bills or pay obama care guess I wont eat thanks goodwill I love my job love bein kujus a person who helps put dollars in there pockets

  3. Bill3419 says:

    These highly skilled athletes lost. The owners are getting more and the players less with this contract. It was a lockout and the owners won.

  4. SteveAR says:

    And you don’t know how to read (see my comment below). I’m no fast-food industry expert, but I’ve worked in them before and still go to them now and again. It doesn’t take a rocket scientist to know that when you see a store full of teenage employees every time you go into one of these establishments, it’s a good bet be the vast majority of employees are teenagers.

    Try the power of observation God gave all of us. It might help you out.

  5. Swami_Binkinanda says:

    This is a lot of speculation and brain flatulence from someone who obviously does not know the fast food industry but seems to have an inordinate amount of passion for seeing other people suffer to satisfy their internal narrative. Back to the Ferrari elevator, Tag.

  6. Swami_Binkinanda says:

    Dysfunctional family, that is. Maybe even co-dependents!

  7. SteveAR says:

    I worked at McDonald’s as a burger flipper when I was in high school. It was easy to get hit with a 30-hour+ work week, especially during the summer. When I go to the burger joints in town, most of the employees are high school kids, especially in the evenings when their school day is done. Just about all of the employees at a fast-food burger restaurant are part-time employees, and the vast majority are teenagers. If they were working 30+ hours a week before this year, they won’t now thanks to Obamacare. As to the adults who aren’t managers, there is and has been Medicaid.

    “Well, why wouldn’t Wendy’s want to attract the best of the people in the fast-food-level employee pool? If you had a ton of competition from other businesses in your industry, and everyone was charging rock-bottom prices, wouldn’t you want to attract the best employees who would keep your business functioning at the highest level possible and who would create an enjoyable environment for your customers?”

    Like I said, I worked at McDonald’s as a burger flipper when I was in high school. I learned three things: 1) It taught me the value of work and being a responsible employee; 2) it taught me I didn’t want to make a career out of it, nor do the vast majority of a store’s employees; and 3) I learned something about the fast-food burger business, and that there was always somebody else, usually another teenager, available to do the same job. If you ever worked in one of these stores, or owned one, you’d understand. If you still don’t, open up a franchise and run it as you think it should, providing vacation pay and health insurance to all your employees, and make sure they are all full time employees. Only then will you get it.

  8. karmanot says:

    The argument that needs exploration is removing health care entirely from business and institute a government universal Medicare for all American citizens. Obama Care is an abomination crafted to feed Insurance companies without cost controls and is so badly written that it permits loop holes a mile wide for garbage food companies to drive though an avalanche of runaway franchises. Great job Obummer.

  9. karmanot says:

    Y’all, aren’t the Son of Ayn Rand are ya. God bless your pea pick’n lil heart.

  10. SkippyFlipjack says:

    I’d go order a Frosty just because they’re awesome. In terms of a “smart business move” though, no, publicly screwing over employees by reducing their hours and eliminating their access to other fulltime benefits like vacation time is seldom a smart business move except in a really narrow, short-sighted way. You’re wrong about them being high school kids, since high school kids are rarely fulltime employees. Yes people do make careers out of working in fast food, because fast food restaurants promote production line positions as paths to management. Regardless, people need healthcare, and because American society ties health insurance to employment, employers need to grant access to their employees. If the underlying system were changed then employers wouldn’t have to bear that burden, but conservatives are against that too, so they’ll just have to deal with it and — gasp — care for the well-being of the workers they’re paying poverty-level wages to.

    Back to this “smart business decision” — so you’re saying that every employer in the US should drop all benefits, from health insurance to vacation to that company car, because they cost money? I mean, that would be a smart business decision. “No,” you might say, “because they’re essential to attracting the best employees.” Well, why wouldn’t Wendy’s want to attract the best of the people in the fast-food-level employee pool? If you had a ton of competition from other businesses in your industry, and everyone was charging rock-bottom prices, wouldn’t you want to attract the best employees who would keep your business functioning at the highest level possible and who would create an enjoyable environment for your customers? *That* is a smart business decision.

  11. filetjr says:

    That’s what happens when government meddles in what should be private enterprise. Get the hell out of the insurance business!

  12. irritatorofthepowerful says:

    I’m not sure it’s a smart business decision but I certainly understand the rationale. The unfortunate employee is caught in the middle: he works less hours resulting in less pay and then is forced to either pay for his own health insurance (which is a new requirement) or pay a tax because he didn’t buy it. George Orwell would understand.

  13. SkippyFlipjack says:

    “There was the local Denny’s franchisee who came up with the bright idea of tacking on a 5% surcharge to every check to supposedly pay for Obamacare.”

    Why is this a bad thing? It’s how they handled food worker healthcare in San Francisco — allowing restaurants to note it as a surcharge. (The comparison makes sense since Denny’s has table service.) It shows the customer that food prices are going up for a good reason, and if customers don’t like it they can choose to not eat there. It also keeps employers from whining about how this is impacting their profit margins.

  14. Ford Prefect says:

    You’re talking about an industry that pays minimum wage and uses high turnover to keep wages down. They don’t want “strong people” as they will request the odd raise. IOW, high turnover is a part of what guarantees their profit margins.

    And with a real unemployment rate in the range of 15-17%, there’s no shortage of people who will grovel for $8 an hour.

  15. Ford Prefect says:

    The words “heartless” and “corporation” go together like oil and dispersants. It is also a perfectly predictable behavior, which is why conscientious policy-makers will write policies to prevent heartless behaviors wherever appropriate.

    But the fact is, they wrote the law that way to give these heartless corporations an out on providing health insurance. The fact is, most minimum-wage earners receive no such benefits anyway, especially in Right To Starve states. This is what happens when you allow corporate lobbyists to write legislation. It’s a Feature, Not A Bug.

    So these corporations are merely using the loopholes their lobbyists put in the legislation in the first place and are now in force, thanks to corrupt congresscritters and a corrupt White House that sees no problem with any of this.

  16. irritatorofthepowerful says:

    This type of action was totally predictable and was, in fact, brought up during the debate on Obamacare. You can also expect to see certain small businesses cap their full-time employee pool below the 50 thresh hold for Obamacare. Also, while President Obama promised that Americans can keep their current healthcare programs if they want to, that really isn’t something he can control. I believe the Congressional Budget Office predicted something like 20,000,000 folks will lose healthcare coverage due to Obamacare; the companies that provide these benefits will figure out that it’s cheaper for them to pay a fine and not the benefits. Not all companies will do this, of course, but many will. The employees will then be forced to buy insurance themselves. One can say that these activities are all unfair but they cannot say they were not predicted.

  17. Houndentenor says:

    The problem here is that for many Americans, insurance is tied to employment. That’s the problem and the solution is to go to single payer. I was always against single payer insurance proposals but more and more I can see that it’s the only possible solution to the mess we have created with our nation’s health care “system.”

  18. Houndentenor says:

    Exactly. There were already widespread reports of companies like Walmart keeping all non-management employees below 30 hours per week to avoid having to pay them benefits. This isn’t new and I suspect most of the businesses we’ll read about that are “now” doing this were already doing it before to most if not all their hourly employees. Our lazy excuse for “journalists” will of course fail to verify what is in press releases and not question what the practice was before with that company and how many employees it impacts.

  19. SkippyFlipjack says:

    I think John’s question is not about getting Wendy’s Corporate to do something, but about getting them on the record as to whether they agree with this action by their franchise so people know whether a full-scale boycott of Wendy’s is in order.

  20. Butch1 says:

    Congress could correct this immediately by imposing heavier taxes on the owners of the franchises who do this to escape paying for their employee’s insurances. You have to make it hurt them more to try and get around doing the right thing by your employees. Make them squeal and complain. Tough! Do the right thing,; you are making money hand over fist at the expense of your workers. Time to get it right.

  21. SteveAR says:

    Y’all really have no sense of context or reality, do you?

    First off, it is Obama’s and Democrats’ fault for passing Obamacare and allowing for this franchise owner to do what he is doing. The other option the owner would have would be to fire a whole bunch of people. Would that make more sense?

    Second, other than store managers (who, by the nature of their jobs, are full-time employees, and may very well have had employer-provided health insurance before Obamacare), who works at Wendy’s? High school kids and adults eligible for Medicaid. Now, why in the world would a franchise owner provide health insurance to high school kids, who very likely are covered by their parents’ health insurance policies? Plus, the employee turnover rate at such places are very high; the administrative costs of keeping track of insuring high school kids are prohibitive.

    As far as adults who work at places like Wendy’s, chances are they work there because there is a dearth of employment elsewhere. And because the wages they would earn would place them below the poverty level, they would be eligible for Medicaid; even more so if they are part-time employees. Again, the turnover rate even for these people is very high; nobody makes a career out of flippin’ burgers, working the fry cooker, or manning the register at Wendy’s.

    So the fact of the matter is, Wendy’s making these people part-time employees is smart business since health insurance is already available to those employees. It’s Obamacare that is forcing these workers to get less hours, the fault of Obama and Democrats.

  22. unclemike says:

    Yes, making sure your food-handling employees do not get any help with health care is the smartest business move in the history of ever.

  23. evan_la says:

    This will be amusing.

  24. evan_la says:

    Of course you would.

  25. Litterbox says:

    bingo. You get it. Everyone else needs to read this.

  26. SteveAR says:

    It’s too bad I don’t live in Nebraska. I’d go to one of these franchises and buy a Frosty, just to show my appreciation for their smart business move and give them my business.

  27. goulo says:

    Good letter and good point!

    (But the misplaced modifier in “After spending millions upon millions of dollars trying to defeat
    President Obama, mostly using ObamaCare to bludgeon him with, I really
    AM curious.” caused me to stumble while reading, as it misleadingly implies that you (Stuart) spent millions of dollars to defeat Obama; perhaps it would be clearer to say “After your spending millions… I really am curious” or “After you spent millions… I really am curious”)

  28. Kenneth C. Fingeret says:

    Hello Bose,

    Unless they pull a Walmart and follow the Walmart Script by making workers go off the clock and still work, etc.

  29. My usual letter to any American company when I find a post like this. I just substitute the name of the companies. Papa Johns, Denny’s , now Wendy’s and I always get a responce. It reads like this: With all the bru ha ha about corporate America’s reaction to the re-election of President Obama, and the Affordable Care Act specifically, I’d LOVE to know how American companies participate in the health care structure of other countries in which they do business. If Wendy’s can threaten the livelihoods of their workers here at home and relagate them to part time status to avoid providing much needed health care than how does Wendy’s corporately operate in the health care systems in Canada & Great Britain and all other international countries where corporate citizenship means affordable health care for your international employees. According to your website you do business EVERYWHERE! How do you manage the health care of your employees in those stores you run in Canada? After spending millions upon millions of dollars trying to defeat President Obama, mostly using ObamaCare to bludgeon him with, I really AM curious. Genuinely so. Why do Americans get the short end of the corporate stick…when American companies operate in countries that offer comprehensive health care? Are you exempt? Does Wendy’s pay nothing? Does your company, Wendy’s pay a lot? Just asking.I won’t shop a Wendy’s restaurant that abuses its American employees….ever. Not while Britain has a national health service and Canada has Health Canada…forr which, I assume you help pay for.

    Thank You,

    Stuart Wyman-Cahall

    6371 Peach Orchard Rd.

    Las Vegas, NV 89142

  30. Jimmy says:

    Even if Wendy corporate disagreed with this franchise, and I honestly don’t know their stance, there’s probably little they can do. As long as franchises meet guidelines about the brand and food preparation they can basically do as they please as long as they pay their franchise fees. Wendy’s can cancel a franchise’s license, but they would have to prove this franchise is damaging the brand, which even in this case would be difficult.

  31. Sweetie says:

    This isn’t a new thing. Hills department store and Wal-Mart both did this. Keeping employees just below full-time allowed Hills, for instance, to not provide any health care

  32. Guest says:

    And it’s probably not going to work. The regulations out for review and comment by the IRS require aggregation of part-time employees for purposes of determining the 50-employee threshold that requires employers to provide coverage or be exposed to penalties. These guys are just stupid, and they’re going to go down in flames — in addition to alienating their customers.

  33. nicho says:

    Guess they’re going to have to reword that part of the employee manual that says “we consider employees as family.”

  34. lynchie says:

    They are all alike. Want SS to be cut so employers don’t have to pay their share. Obama care an excuse to screw workers. Wait till they start blowing their nose in the Spicy Chicken sandwich. How much is enough for these companies. Why don’t they see if we are left with a few crumbs we actually will believe we are doing ok.

  35. Tony Mac says:

    Interesting juxtaposition…directly beneath this story of how Wendy’s employees are going to bear the burden of greedy management, is a story of how the UNION representing NHL players has reached an agreement with team owners. See, with a union, those already rich, insurance covered hockey players will get better pay and better working condition while the poor slobs working at Wendy’s, McDonald’s…take your pick, will get screwed…No wonder the Republicans want to decimate unions…very sad

  36. Phil says:

    John, do you think this is, in any way, an unusual practice? Especially in retail, fast food, and other industries notorious for low pay, lousy benefits? Obamacare just gave them one more excuse to add to the list of “business conditions,” the economy, and, perhaps the most famous of all: “we’re outsourcing the work to independent contractors – are you interested in becoming one of those contractors?” These practices are actually quite pervasive.

  37. Bose says:

    So, the message from businesses to employees is: We are incompetent business people. We would rather sacrifice quality and profit (they’ll lose their strongest people, more staff are required, and it costs more to manage large part-time staffs) than treat you fairly.

    Crunching the numbers, the additional staff required depends on how many folks are already at less than 40 hours, but they’ll need to hire 25-40 new people to get the same number of work hours to run their business, plus the replacements for those who leave.

  38. UncleBucky says:

    Ooops. Well, that’s another one on the list headed by Walmart. Anyone have a master list of all the bastard “corporate persons”? ;o)

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