Olive Garden, Red Lobster to Cut Hours Instead of Giving Health Insurance

[Tadaa]

Darden Restaurants, Inc., which owns omnipresent suburban chains Red Lobster and Olive Garden, is gearing up to deal with new federal health care requirements. According to the AP, the restaurant group — which employs 180,000 people at over 2,000 restaurants — is running an experiment in four markets that increases the number of part time employees. (Darden isn't giving out specific numbers at this time.) This is an effort to curb full time employees, as the federal government — because of the Patient Protection and Affordable Care Act (aka ObamaCare) — will begin fining employers for not providing basic health coverage to full time employees starting January 1, 2014. It also means servers at Red Lobster now manage four tables at a time instead of three, in case you're wondering why your endless popcorn shrimp refills were taking so long.

Darden Restaurants, Inc Brands

• Seasons 52
• Red Lobster
• Olive Garden
• Bahama Breeze
• The Old Grist Mill Tavern
• LongHorn Steakhouse (2007)
• The Capital Grille (2007)
• Eddie V's Prime Seafood (2012)
• Yard House (2012)

Papa John's take similar action

 

[frankfrank]

Wow, it's at least 20 years since I've eaten in a Darden restaurant. Some of these names I don't even recognize at all.

This "part-time loophole" has been used by a lot of corporations for a long time, and probably the CEO is just using Obamacare as an excuse for an employment policy that they would have most likely taken anyway.

 

[justdra]

Walmart has been using this tactic since I can remember. They have a lot of PT employees and many trying to support families from it.

 

[zoltanspawn]

Why not just raise prices to cover the cost?

 

[rareboy]

^ Because Americans love a deal.

 

[PreTTy PeTe]

The big stores just hire part time people..........they been doing for a long time.

Go to any supermarket in Canada and you properly won't find any full time employes except for management.

Go to any Walmart here and it's the same thing.

Now Target is coming to Canada and with that all the people who worked for Zellers are out of work but all we keep hearing how many jobs Target is going to create. How do create jobs when by your actions you destroy jobs? No loss Zellers only hired part time people.

all to save a buck.

hell is waiting for these people who run these corporations.

 

[G-Lexington]

I'm assuming this will happen across the board. Every company that possibly can will simply knock all their full-time employees down to 30-hour part-timers. Especially if (as I imagine) people don't care and keep going there anyway.

Lex

 

[justdra]

During the holidays they work them like FT employees but you can only do that for so many weeks before you are considered FT by law and then their hours are almost cut in half to make up for OT they mad during the holidays.

 

[Beachguyj]

The big stores just hire part time people..........they been doing for a long time.

Go to any supermarket in Canada and you properly won't find any full time employes except for management.

Go to any Walmart here and it's the same thing.

Now Target is coming to Canada and with that all the people who worked for Zellers are out of work but all we keep hearing how many jobs Target is going to create. How do create jobs when by your actions you destroy jobs? No loss Zellers only hired part time people.

all to save a buck.

hell is waiting for these people who run these corporations.

I thought Canada had socialized medical care.

 

[PreTTy PeTe]

I thought Canada had socialized medical care.

It has nothing to do with medicare. We all have that.

The corporations will do anything to save a dime.

I don't know the exact reason but someone here does. Maybe it helps save paying Canadian Pension Plan(CPP) or Unemployment premiums. But they do it to keep all the workers at minimum wage.

I'll check on it.

Don't give up on Universal Health Care.....It's an amazing thing. It saved my life.

 

[JayHawk]

Well look at it this way... with health exchanges people will have access to cheaper plans that they wouldn't as part time employees previously.

Additionally, as companies cut full time hours but still have the same services to provide which means they will have to hire other employees to cover those hours.... so unemployment will drop as more people are doing the same work. Germany and their unions actually used this as a tactic to prevent laying off workers during the downturn.

So lets see Americans get less work hours but no will have access to healthcare.... I see our lifespans increasing. ......

 

[Saybrooke]

Ugh... :/ that's so sad...

 

[bike10]

More money in the pockets of owers.

 

[Luciant]

Obamacare, as it stands now, will cost more jobs than it will save, and Obamacare will certainly not reduce healthcare costs. The program needs to be beefed up (i.e. adding the public option) or it needs to be scraped and replaced with a program designed to reduce costs, not just expand coverage.

 

[RaspberryTurtle]

Extend the coverage to part-timers then, corporations can't fire everyone then.

 

[birddog7]

Walmart has been using this tactic since I can remember. They have a lot of PT employees and many trying to support families from it.

So does Food Lion, Coors, Hershey, McKee Foods, and countless others. Temps and part timers are cheaper. I do hope hell is waiting for the greedy rich who run these big corporations...

 

[mikey3000]

That is exactly why I've changed my shopping habbits years ago. I don't do big store retail shopping at all anymore. I do thrift store shopping and local mom and pop stuff. The retail giants and their greed have gotten way outta hand. It's all corporate greed now and we as consumers have the power to stop it we just have to get over OUR greed as consumers.

These stores are doing nothing more thsn what we do as consumers, we want more for less too, right? So do retailers. Don't blane them unless you are willing to do something about it. Easy peasy.

 

[Ninja108]

This has been going on long before OBamacare came into play. Now the greedy CEO's simply have another thing to blame it on.

 

[zoltanspawn]

They don't have to cut hours or raise prices. This is just more silly nonsense from CEOs unhappy with Obama's re-election. They threatened to do this if Obama is re-elected. These CEOs are making enough money as it is.

Restaurant profit margins are usually slim. Little slivers of profit are earned through hundreds, or thousands, of low-priced transactions.

Can restaurants like the Olive Garden really sustain the cost of healthcare without cutting hours (or other costs) or raising prices? That is, through reduced profit?

I'm not super familiar with the economics of that kind of restaurant.

 

[zoltanspawn]

We're not talking about a mom and pop restaurant chain. Their profit margins aren't slim.

http://www.cnbc.com/id/49116731/Darden_Profit_Aided_by_Olive_Garden_Sees_More_Growth

In fact Olive Garden is a big money maker and helped boosted their overall growth.

Yes, they can sustain the cost of health care without cutting hours or raising prices. Darden isn't a small company barely getting by. I'm sure this health care plan won't eat much into their solid profit margin and high growth levels.

I think it's safe to assume that at least around a quarter of their work staff now is full time, or around 45,000 employees. I'm not sure that the health care plan won't have a significant impact on their profit, even if the company is doing well. I guess I would want to look at real numbers first, before deciding one way or the other.