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article imageDenny's franchisee to cut employees' hours, blames Obamacare

By Yukio Strachan     Nov 16, 2012 in Business
West Palm Beach - Florida restaurateur John Metz, who owns and operates 40 Denny’s restaurants, said in order to avoid having to provide health care for his employees, he will cut back his workers’ hours.
“People are trying to find ways to avoid the penalties and to avoid having to pay for ObamaCare,” Metz told “Everyone’s looking for a way to not have to provide insurance for their employees. It’s essentially a huge tax on all us business people.”
Metz oversees roughly 1250 employees as president and owner of West Palm Beach-based multi-brand franchise company RREMC Restaurants, LLC – which includes restaurant, hotel and real estate groups.
RREMC Restaurants currently owns and operates 40 Denny's restaurants and several Dairy Queens. He also owns five Hurricane Grill & Wings franchises in Florida, which has 48 locations, five of which are corporate owned, the Huffington Post said.
Metz said he will hold meetings at all his restaurants starting in December to tell employees "that because of Obamacare, we are going to be cutting front-of-the-house employees to under 30 hours, effective immediately."
“The ones that are working more than 28 hours, they’re going to act as if I’m cutting their hours and they’ll have to find another job," he said.
Under the Affordable Care Act, businesses with more than 50 employees are asked to provide health care to their employees. If they do not, and their employees qualify for subsidized coverage in the exchanges established by the ACA, employers must pay a penalty for any employees over 30 full-time employees that they don't cover.
The policy, championed by Republican Sen. Olympia Snowe (R-ME), is designed to discourage employers from opting out of providing health coverage, and to ensure that they contribute to the system as a whole, ThinkProgress reported.
But with an average of 35 full-time employees per location, Metz said the $2,000 penalty would total roughly $70,000 per restaurant. Current coverage costs Metz up to $6,000 annually per full-time employee, he said. He currently provides coverage to about 250 employees.
"Obviously, I'd love to cover all our employees under that insurance," he said. "But to pay $5,000 per employee would cost us $175,000 per restaurant, and unfortunately, most of our restaurants don't make $175,000 a year. I can't afford it."
Currently, RREMC Restaurants has over $50 Million in annual sales, Metz's LinkedIn profile says.
The total projected 2012 revenue for the U.S. fast food industry is $195 billion, according to statistics by IBISWorld, a market research firm. By 2016, revenue is expected to increase to $210 billion.
Despite his new policies, Metz said he hopes his employees will be inspired to act on their own behalf. "What we're going to ask them to do is to speak to their elected officials, to try to convey what this means in terms of their jobs and their livelihoods," Metz said.
The director of Restaurant Opportunities Centers (ROC) United, Sarah Jayaraman told MSNBC earlier this year that she believed some restaurant owners were using the excuse of Obamacare to cut back on labor costs.
According to WAFB news, Restaurant workers around the U.S. are among the least insured and least paid workforces in the country.
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