Not So Fast: 10 Companies That Threatened to Cut Worker Hours to Avoid Obamacare Are Rethinking Or Backing Off
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Darden spokesperson Rich Jeffers says the company never considered moving any employees from full-time to part-time status. (Their staff has historically been about 75 percent part-timers and 25 percent full-timers.)
“In a very limited number of restaurants we looked at if we had people churn out of full-time positions, what would be the impact if we backfilled those with part-time employees,” says Jeffers. “We looked at it and saw that it negatively impacted the guest experience and employee engagement, what we saw was that we absolutely need those full-time positions. So we’ll continue to keep it the way it is, we’ll continue to have full-time and part-time positions in our restaurants today and in new restaurants.”
3. Jimmy John's
When Jimmy John’s CEO Liautaud declared that Obamacare would force him to cut employee hours, he was agreeing with his Fox Business News’ host that his company would follow what he understood to be Darden’s example.
Jimmy John’s spokespeople could not be reached for comment. But workers and managers from across the country told AlterNet that most of the chain’s workers are already officially part-time, although covering a co-workers’ shift is common practice and often results in 40-or-more hour work weeks. (Managers’ bonuses are pegged to a store’s labor costs, so they are already incentivized to take a minimalist approach to personnel.) Franchises in Kentucky and Florida reported no mention of Obamacare’s potential effects.
But a Jimmy John’s employee in a major Midwestern city reports that the company, or at least the owner of this franchise, is following through on Liautaud’s threats.
“My manager has told all of us several times that they are going to cut our hours down to 28 or 25 hours a week, specifically because of that law,” says one Jimmy John’s employee, who asked to remain anonymous for fear of retaliation. “I work most of the time over 30 [hours a week], as do more than 50 percent of my co-workers.”
This accords with the threat analysis of UC Berkeley’s Center for Labor Research and Education, which estimates that 3.1 percent of the workforce employed by large firms are “most vulnerable to work reduction.” Workers in the restaurant, hotel, building service, nursing home, and retail trade are at greatest risk, all industries that have historically provided low pay and health benefits except when forced by law or worker organizations.
“There is a risk of employers cutting hours in certain industries and we assume the workers that are most vulnerable to these reductions are those who work slightly more than 30 hours a week, don’t currently get coverage on the job, and have income at a level where they might be eligible for exchange subsidies,” says Laurel Lucia, policy analyst for the Center for Labor Research and Education.
It’s impossible to say if this policy is coming from on high or is the action of one particularly reactionary franchisee. Only one way to find out: Call the manager of a local Jimmy John’s and ask if they intend on evading the law, too.
4. AAA Parking
Other companies are more upfront about their plans to escape their nascent obligations. According to a March 2013 Atlanta Business Chronicle article, Atlanta-based parking garage company AAA Parking planned to reduce half of its 500 full-time hourly employees to part-time hours. The company told the Chronicle that it must make “substantial changes in our hourly staffing models, or suffer an enormous and unsustainable annual net loss.”
When AlterNet called to inquire if the company followed through, AAA Parking’s spokesperson referred back to the Atlanta Business Chronicle article. “That’s all we have to comment on it at this time. There’s really no change to our plans, what we’ve stated previously is still the plan going forward.” If so, that means 250 employees were relegated to part-time positions as of April 15.