In the latest employer backlash against the high costs of President Obama’s signature health-care plan, a major Denny’s and Dairy Queen franchise owner says he is considering adding an “Obamacare” surcharge that would raise his restaurant’s prices by 5 percent.
John Metz, a Florida businessman who owns about 40 Denny’s and several Dairy Queen franchises, told the Huffington Post he also is considering cutting employees’ hours so as to avoid the mandate to provide health insurance to full-time workers.
“If I leave prices the same, but say on the menu that there is a 5 percent surcharge for Obamacare, customers have two choices,” Mr. Metz said. “They can either pay it and tip 15 percent or 20 percent, or if they really feel so inclined, they can reduce the amount of tip they give their server, who is the primary beneficiary of Obamacare. Although it may sound terrible that I’m doing this, it’s the only alternative. I’ve got to pass the cost on to the consumer.”
Mr. Metz, who also runs several Hurricane Grill & Wings locations, is the latest restaurateur to react harshly to Mr. Obama’s health-care plan since the president’s election victory made it certain that the law would not be repealed by a hypothetical President Mitt Romney.
Such major chains as Applebee’s, Papa John’s, Red Lobster and Olive Garden have announced similar layoffs and hour reductions. Many also are facing backlash from the president’s supporters who are threatening to boycott these companies.
The health-care law, once it goes into effect, will require companies with more than 50 full-time employees to provide health insurance for them or be fined. In response, many companies are laying off workers, cutting back their hours, and raising prices.
Neil Trautwein, a vice president at the National Retail Federation, said he’s not surprised by the actions these companies are taking.
“We warned Congress,” Mr. Trautwein said. “Obviously, the election passed and these are not political decisions. These are sober-minded businesses decisions.”
He expects more businesses to take similar measures in 2013 and 2014 as more parts of the health-care law go into effect. “They’re beginning to think about the economic consequences,” Mr. Trautwein said. “I’m sure this isn’t the last we’ll see.”
Mr. Metz said his “Obamacare” surcharge, which at this point is only under consideration, could take effect in January 2014, but reductions in hours may happen sooner. He plans to meet with employees in December to tell them “that because of Obamacare, we are going to be cutting front-of-the-house employees to under 30 hours, effective immediately.”
“I think it’s a terrible thing,” he said. “It’s ridiculous that the maximum hours we can give people is 28 hours a week instead of 40. It’s going to force my employees to go out and get a second job.”
Mr. Metz said he was sympathetic to the problems this would create for employees, but he shifted the blame to the Obama administration.
“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,” he said.
In New York, a large Applebee’s franchise owner has drawn backlash from employees and customers for announcing last week that he wouldn’t continue expanding and is considering layoffs.
“We’ve calculated it will (cost) some millions of dollars across our system,” Zane Tankel, chairman and CEO of Apple-Metro, told Fox Business Network. “So what does that say? that says we won’t build more restaurants. We won’t hire more people.”
In response, Brandon Baker, an Applebee’s waiter in Seattle, told the Huffington Post, “it’s ridiculous with all the money they make they can’t take care of their employees. They sit in their mansions and we scrape by. I have no idea what it would be like to get a real break or have sick days or insurance.”
• Tim Devaney can be reached at tdevaney@washingtontimes.com.
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