Red Lobster Employees Soon to Experience the Change that Came Because of the Hope
In an experiment apparently aimed at keeping down the cost of health-care reform, Orlando-based Darden Restaurants has stopped offering full-time schedules to many hourly workers in at least a few Olive Gardens, Red Lobsters and LongHorn Steakhouses.
Darden said the test is taking place in "a select number" of restaurants in four markets, including Central Florida, but would not give details. The company said there has been no decision made about expanding it.
In an emailed statement, Darden said staffing changes are "just one of the many things we are evaluating to help us address the cost implications health care reform will have on our business. There are still many unanswered questions regarding the health care regulations and we simply do not have enough information to make any decisions at this time."
Now, you get to cook and schlep all-you-can-stand overcooked shrimp without qualifying for benefits.
What does that mean?
By reducing their employees' hours to below 30, they will be classified as part-time employees, and as such, they will not qualify for health insurance benefits, which means that these employees will have to go buy their own, which of course they will not afford since they are only working 30 hours a week.
If they don't buy that insurance, but those 30 hours of work elevates them above the official poverty level, they will be fined (or in extreme cases jailed), for not buying insurance.
Are you following me so far?
Why is this story so unique?
Because Darden's CEO, Clarence Otis, Jr. is a former (and significant) Obama supporter, donating nearly $35,000 to Obama's 2008 campaign.
Otis seems to be having second thoughts about the whole Hope and Change thing, or at least, that's what any reasonable person would believe after reading his essay published in CNN.com last December:
What's stopping job creation? Too much regulation
By Clarence Otis Jr., Special to CNN
Editor's note: Clarence Otis Jr. is CEO of Darden Restaurants, parent company of Olive Garden, Red Lobster and LongHorn Steakhouse. He is a member of the board of the Federal Reserve Bank of Atlanta.
Orlando (CNN) -- "Businesses adding jobs" is a headline every elected official loves to read. Sadly, it's one that's getting harder and harder to find because of a policy and regulatory landscape that makes it increasingly difficult for businesses to see why and where creating new jobs makes sense.
That's especially true for me and my colleagues in the restaurant industry, who find ourselves facing a plate piled high with more and more federal, state and local regulations.
Regulatory mandates flowing from federal health care reform may be the most visible, but the list also includes measures such as new mandatory paid leave provisions that require us to change the way we accommodate employees who need to take time off when they are ill and ever more unrealistic requirements regarding employee meal and rest breaks that, in California for example, force our employees to take breaks in the middle of serving lunch or dinner.
This reality is the result of the best intentions. Policymakers working in silos at every level are pushing through regulations that on their face seem to address admirable goals -- that are each directed at outcomes that seem desirable.
The cumulative effect of these regulations, however, is significant damage to the hard-working Americans who are the intended beneficiaries.
His essay is worth reading in its entirety.
So then, what is it that we have here?
An enthusiastic Obama supporter who has come around to understanding just how damaging the Obama administration's policies are to his industry, and by default, all industry, who, as a result of the policies set in place by the man he helped elect to office, is now taking salary and benefits away from his employees in order to maintain his businesses' profitability, and general viability.
This is an astonishing thing to flow from the "pen" of an "inner circle" Obama supporter:
Policymakers and pundits bemoan the economic news of the day and chastise the business community for not "investing" or creating jobs to help lead us out of the recession. But through the lens of a business owner, a regulatory "perfect storm" is forming that causes even the most well-intentioned business leaders to pause.
My plea to policymakers is simple: Before you impose another well-meaning mandate, consider the burden we already bear and engage us in conversation.
Here is the second curious thing about this situation, as reported by The Orlando Sentinel, in October, 2010:
Orlando-based Darden Restaurants is getting a break on part of the health-care reform law requiring companies to raise significantly annual coverage limits for low-cost insurance plans starting next year.
Darden is among more than 100 companies nationwide that have received one-year waivers, including McDonald's, Ruby Tuesday and Cigna, which writes health insurance plans.
The delay from federal government is for companies that offer limited-benefit, or "mini med" plans, often for low-wage, seasonal and part-time workers. Such plans generally don't cost much for companies and employees, but they also provide limited coverage — often just a few thousand dollars annually.
The new health-care reform law says limits on coverage can be no lower than $750,000 starting next year. The minimum goes up until 2014, when more comprehensive changes go into effect and annual limits will be banned for most plans.
Darden's waiver would apply to 34,000 employees, or about 20 percent of its 174,000-person workforce. Most of Darden's employees work in its restaurants such as Olive Garden, Red Lobster and LongHorn Steakhouse.
Darden would not answer questions about its insurance benefit limits or how much money its waiver would save the company.
In a statement, Darden said it offers all employees access to affordable health insurance, and "the waiver allows us to continue to do that as the various phases of the health care law are implemented."
Companies can apply for waivers in subsequent years up to 2014.
Government officials said the waivers were necessary to keep coverage and costs low for those with limited plans.
"The waiver process ensures that individuals with limited benefit plans will not be denied access to needed services or experience more than a minimal impact on premiums," the U.S. Department of Health and Human Services said in an e-mailed statement.
Darden Restaurants received a "friends of Barry" waiver for 20% of its employees, presumably 20% of the cost of Obamacare's implementation, renewable through 2014, and that STILL is not enough to make the implementation of Obamacare financially viable for the world's largest full-service restaurant company.
If these guys can't make it, what chance of surviving this atrocity of a legislation will the three-unit, in-the-family-since-grandpa-built-it pizzerias, the thousands of privately owned deli and sub shops mini chains, that corner sports bar with the great wings and the coldest beer around, the four brothers running neighborhood bakeries have?
Think about all that, then answer one simple question...whose policies are truly hurting America's middle class?