Alan Diaz / AP
An Olive Garden restaurant is shown in Hialeah, Fla., Thursday, Sept. 6, 2012.
Darden Concepts, Inc.—the umbrella corporation behind Red Lobster and Olive Garden, among other chain restaurants—is experimenting with hiring more part-time staff in order to offset the cost of implementing the Affordable Care Act. Rich Jeffers, a spokesperson for Darden, said the company was working on finding the "optimal mix" for satisfying the law's requirements while "address[ing] the cost implications of the Affordable Care Act."
"We're not moving people from full time to part time," said Jeffers. Instead, Darden has been "bringing on more people in part-time roles" in the restaurants they've opened since February, when the experiment began. The question the experiment is supposed to answer, he said, is, "Can we continue to deliver our brand experience with more part-time?"
If the experiment is a success, the company overall could come to rely more on part-time workers. Those new employees would likely not enjoy the same health benefits that all employees currently do. "Today we offer health care to all of our employees," said Jeffers. But under the Affordable Care Act, which sets minimum standards for the health care being provided, "we can't offer that."
Conservative and libertarian commentators have argued that the cost of the Affordable Care Act to employers would compel them to lower wages and hire more part-time employees. Darrell Issa, the Republican chairman of the House Oversight Committee, said as much in his July preview statement regarding hearings on the consequences of the law.
Saru Jayaraman, the director of Restaurant Opportunities Centers (ROC) United, alleged that Darden was using the Affordable Care Act as a mere pretext to cut back on labor costs. "Maybe they want to portray that that's the cause of the issue, but it really isn't," she said. As In These Times reported in July, ROC has been engaged in a multi-city campaign against Darden for months over charges of wage theft, grueling hours, unpaid overtime, and even racial discrimination.
Jayaraman also said that Darden was wrong to claim it had not cut hours for full-time employees. "Since we've started the campaign we've received messages ... from workers saying similar things saying their hours are being cut, their positions are being cut," she said.
CNBC reports that Darden has been working to cut labor costs for years. In fact, in the past three years, the company has managed to whittle labor costs down from 33 percent of sales to 31 through policies like asking servers to handle more tables at once, and instituting a "tip sharing" policy, "meaning waiters and waitresses share their tips with other employees such as busboys and bartenders."
The Economic Policy Institute's health policy research director Elise Gould said that pivoting to a greater reliance part-time labor would also reduce costs, with or without the Affordable Care Act in place. "When I think about the incentives that firms have to have part-time versus full-time workers, there are already plenty without the ACA," she said. For example, many companies have increased their reliance on part-time work since the recession because they can give part-timers fewer benefits, such as retirement benefits.
Indeed, the number of involuntary part-time workers in the overall workforce increased sharply right after the beginning of the recession. In December 2008, the Bureau of Labor Statistics reported [PDF] on a sharp rise in "involuntary part-time work"—that is to say, work done by people who would prefer to be in full-time jobs but were unable to find any. As the Wall Street Journal reported last week, "Part-time jobs now account for 6 percent of all jobs, double their share before the Great Recession." Restaurant work in particular is disproportionately part-time; by Jeffers' own admission, "our overall workforce today is 75 percent part-time," even before Darden sees the results of its experiment.
A recent study [PDF] by the Urban Institute found that the law's provisions, once they all go into effect, would only increase large business' overall spending by 4.3 percent. However, Jeffers argued that there are too many unanswered questions about how the bill will be implemented. "What we don't know is how are we going to address the requirements for part-time employees, and we just don't have enough information," he said. When asked what additional information Darden needed, he added, "What are the regulations? What does it look like?"
Katie Niebaum, a spokesperson for the National Restaurant Association, echoed Jeffers' concerns about uncertainty. "We have known for some time that the mechanics of the law are very difficult for the industry," she wrote in an email. "As restaurateurs look to 2014, they are evaluating various options for implementing the law, while many of the regulations/details remain unknown."
But Jayaraman suggested that major restaurant chains make similar arguments when confronted by any new regulation. "This is nothing new," she said. "Every time there's some kind of new regulation, they try to get the industry in particular exempted." As an example, she pointed to industry's success in securing a federal minimum wage for tipped service employees of only $2.13 before you factor in tips.
"It has nothing to do with the actual setup of this industry," she said. "It has to do with the power of the lobby."
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i would like to heard a reply to this.
Please this dude is full of it, bet if it was Romney Care he wouldn't care.
Darden is free to pursue whatever business practices they deem appropriate. I for one will never eat in one of their restaurants again - and I'm sure I won't be the only one.
Darden also owns the Longhorn Steakhouse, the Capital Grille, Bahama Breeze, Seasons 52 and Eddie V's.
I too, decided to not there again. I almost want to ask the host/ess before sitting down at a national chain and ask does you restaurant offer health benefits to the employees?
New dog, old trick. This isn't anything that other businesses haven't tried before. Walmart is guilty of hiring part-time employees to keep from offering benefits. They should start threatening to bring in a union. That might change their tune. The restaurant business is absolutely run by people which every way they please. You go to the labor board with complaints and no one backs you up.
Wait a second. if they already offer health care to all of their employees, they are already in compliance with the PACA. Something in this 'experiment' stinks.
I'll simply boycott Darden and it's affiliates, as I do Papa John's pizza.
They offer, like other large restaurant corporations - ie Brinker (Chili's) or YUM (Taco Bell) etc. health benefits to corporate and store (restaurant) management employees but almost no restaurant offers benefits to the servers (even if full-time) or kitchen staff. Or,they may offer it but most don't accept it as it is not affordable for them. Affordable Care Act states health care choices must be made to all that are a certain percentage of their prior year's W-2. To get a kitchen employee at $7/hour with a family coverage it has to be around $150/month...with the company picking up the balance (the other $500-700 for a FAMILY). I work in the industry and it is a huge issue for us but , I believe, it is the right thing to do. Plan on the value meal going way, way up.
Thank you Pacific NW Mark for stating the names of the other chain restaurants they own, so I can be sure to avoid all of them now.
Employers should provide healthcare for their employees because it is the right thing to do but unfortunately they will not do so unless forced. However employers shouldn't be the only ones feeling the pain: I would like to see the insurers take a cut in their profits too.
Red Lobster is a part of the chain also.
A lot of employers started hiring part-time a few years ago to cut down paying benefits.
Stated many times through the years and during this campaign, employers should not be the middleman in this situation precisely because they have 1) no business choosing what medical/health insurance plan employees should buy, or the services that the insurance plan offers 2) it makes the employees virtual serf's at the mercy of the employer. Employers do not 'give' this shared cost, the funds for the employer's 'share' comes from the profits the employee creates with his/her labor. And this money should go directly into the employees paycheck. Some states are creating policy exchange coops that individuals and families can choose a medical/health care insurance provider from. This gets the employer out of the middle, and frees the employee. Get employers out of this position and free the working man and woman from servitude!
To not have employers in the middle we will need universal healthcare, that gets rid of the middle man. These people are hypocrits, over the years we have seen, employee reduction in pension plans on the job, they are now subject to what amounts to rip off and that is 401K's that were never meant to replace pensions but they have. Now they do not want to pay for healthcare when the salaries they are paying is so small that these employees cannot offord healthcare from their salaries. There need to be a law against these people only employing part timers just to avoid the laws. its horrid, people should boycott his restaurants.
exactly, junipper15! "To not have employers in the middle we will need universal healthcare,"
need to work on that, next
They can do as they want, and if they care so little for their employees, I for One am DONE with eating at their restaurants!
I was in a restaurant in DC a few days ago and was in shock at what these compaines pay their employees. this girl's hourly salary was under $3 per hour, she depends on tips to make up her salary. These people are ridiculous, we now have a workforce that gets paid less than some third world countries. I hardly ever eat in these restaurants, but when I have the urge, it will be turned off completely, that is what these people need, Americans saying no.
This is again the rich getting richer...and the little man/woman left out in the cold. The bottom line...never about the needs of the people who keep these businesses going. It's not Obamacare that's the problem, it's greedy people who only care about the Almighty dollar.
It's not because of the Affordable Care Act...they are just following WalMart's example of reducing hours to reduce all benefits to employees...the restaurant industry wants employees to be loyal and show up everyday and make the company look good...but the company doesn't give a rat's ass if the employees have health care! Greedy bloodsuckers!!!!
This man is a big Romney supporter. I have seen this man at many Romney functions, standing in the background. And according to this article, Darden Concepts is doing very well.
Sounds like that guy who told his employees that if President Obama won, they would all loose their jobs. These are the "Job Creators"? How is threatening to fire all of your employees creating jobs? These are bullying tactics against people who need work, and to do this amounts to harrassment! I wonder what he would do if a picket line of customers started telling everyone what a cheap and unfair employer he is! Occupy Wall Street should branch out to other avenues....
I don't understand why he can't pay healthcare insurance for his employees. Full time service people make around $2.50 and then tips, they pay taxes on thier tips and then they have to share their tips with the buser of thier tables.
So if you work 40hrs a week at $2.50 a hour that is $100 a week, then the way people tip, which should be 15% of the bill, you may make $50 in a 8hr shift then you split your tips with the person who cleans your tables so that's what $125 a week with reg pay and tips.
So why can't this person provide basic health care for his employees?
Part of the reason I got out of the restaurant business as a server (didn't make enough $ to support myself). Although the company I worked for offered health insurance and it was affordable. We were paid $4.35/hr and we only had to tip share during the busy shifts (night). I worked mostly day shifts because I went to evening classes. I finished school and moved on to a more lucrative career.
The owner of Darden Concepts is always visible in Mitt Romney photo opts. Start looking. You will see this tall, black man in the background. And according to the owner, the restaurant is doing very well.
The Darden's are white. The black man is Tom, as in Uncle.
There is a new book coming out called "Economics for Dummies". It is highly recommended that liberals read it.
I have a copy of Arithmetic 101 for any righties that need to freshen up as well...
I used to work for OG. They don't give a rats tail about their employees anymore. They used to. But they got stingy just like every other business out there. Ask a private business owner how much he makes. After he answers, multiply it by 10 because he pays himself under the table, doesn't pay taxes on it and still reaps the benefits the system gives them. Don't you dare feel sorry for Darden. They'll still get their bonuses no matter how difficult times are. Staffers get the shaft!
I use to work for the Dardens, very nice people before. Money and greed changes everyone!!!
They just need bigger tax breaks so they can pay for the cost of health insurance. At least, that's what I think they might do.
Sears did this back in the early 1990s and got away with it. I'm sure Olive Garden et al will also. But I too will not eat there again.
Mmm-hmm.. and how did they deal with Romneycare in Massachusetts? They have at least 15 Olive Gardens there, so what is so different about Obama's law that you have to join in the Republiklan "Threaten The Voter's Livelihood" tactic that's gaining steam now?
me an my family are constant dinner at red lobster at least twice a month i agree with the rest we will never eat their again business owner should never get involved in poltics they can lose their customers so be it wwe will go to other place to spend our money so eat that
Why can't is be as simple as Medicare for All? That way, businesses do not have to worry about healthcare for their staff. The corporations (I've dealt with Darden before. They are NASTY) can then seek other ways to cheat their employees out of life, liberty and the pursuit of happiness. Too bad Obama caved and didn't go for Single Payer. Just like the United States Military has already.
Single Payer is the only way to go. Overhead would be about 3% instead of 20%. Everyone is covered no matter what. If all you can get is a part time job, you will still be covered.
I wish Obama had put single Payer, Medicare for all or any other name, on the table for the Affordable Care Act. I really hope we are on the slippery slope to single payer health care.
I am curious, don't business that employ people pay more for Workmen's Compensation Insurance if they have a larger total of employees? Don't they also have other types of insurance that is based on the number of employees employed, not the hours those employees work. Like Disability Insurance and the Business' portion of SSI & Medicare payments.
Would purchasing health insurance for less employees cost so much more than those costs and the additional turnover costs they'll enjoy due to being a selfish rat-bastard corporation? Can't we boycott business that carry out these scare tactics to effect the upcoming elections?
Just wondering
Wake up people. YOU'RE paying for obamacare. These businesses are forced to raise menu prices to cover obamacare for their employee's. Everytime you eat out, YOU'RE paying more !!!!! You shop in a food store, YOU'RE paying for Obamacare coverage for every food store employee !!!
Wake up, where do you think these businesses are getting money to pay for this "business mandate"?? FROM THE CONSUMER, who voted for Obama.
"Affordable Care Act to employers would compel them to lower wages and higher more part-time employees."
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"Higher more..."
The dumbing down of America is complete. Illiteracy has been achieved.
Looks like the new beginning of a part time world.They new pay salary cap is $14.000 a year so you will insured by Medicaid for health insurance.I knew this health care bill would sock it to the little guy even more.Now there is NO MORE OVER TIME for you!
The buisnesses are loving it!