Obamacare response ... limit hours

Darden tests limiting worker hours as health-care changes loom
Excerpt:

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." "I think a lot of those employers, especially restaurants, are just going to ensure nobody gets scheduled more than 30 hours a week," said Matthew Snook, partner with human-resources consulting company Mercer. Darden said its goal at the test restaurants is to keep employees at 28 hours a week. Analysts said limiting hours could pose new challenges, including higher turnover and less-qualified workers. "It's a real problem for restaurants," said Howard Penney, a restaurant analyst and managing director for Hedgeye Risk Management. Darden, the world's largest casual-dining company and one of the nation's 30 largest employers, said it offers health insurance to all its approximately 185,000 employees. Many are offered a limited-benefit plan. That type of coverage is being phased out under health-care changes, which will ban annual limits for most plans. About 25 percent of Darden workers are full time, meaning they work more than 30 hours a week. Though employees say Darden already offers traditional health insurance to full-timers, Janney Capital Markets analyst Mark Kalinowski said the cost of providing that could become higher for Darden under the Affordable Care Act. Because that law requires everyone to have health insurance, more workers will likely choose its coverage, Kalinowski said. "Even a modest jump up in the amount of employees that decide they want the insurance you're offering could have a meaningful impact on your bottom line," he said. Under the system Darden is testing, employees are to be scheduled for no more than 28 hours each week. They can run over that if things get busy, but Darden acknowledged they are not supposed to exceed 30 hours. At a new Olive Garden in Stillwater, Okla., former busboy Keaton Hasty said employees were routinely limited to 29 1/2 hours.

Comment: Any surprises?