White Castle On Obamacare: We May Only Hire Part-Time Workers

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r-WHITE-CASTLE-BURGER-large570.jpgWASHINGTON, DC – JUNE 14: White Castle employees cook their slider burgers before delivering them at the U.S. Capitol to celebrate the company’s 90th anniversary with a ‘Castles at the Capitol’ event June 14, 2011 in Washington, DC. Representatives of the Columbus, Ohio-based company hand-delivered their slider burgers to waiting congressional employees during their lunch hour. (Photo by Win McNamee/Getty Images)

White Castle is considering hiring only part-time workers in the future because of fears Obamacare will impose detrimental costs on its business, Vice President Jamie Richardson said in an interview with HuffPost Thursday.

The restaurant chain has no intention of firing members of its current full-time staff or reducing benefits as a result of President Barack Obama’s new health care law, Richardson originally said in an interview NPR published Wednesday.

Yet Richardson told HuffPost that it must consider all options with the company’s healthcare costs set to rise 35 percent once the law is implemented.

The 2010 Affordable Care Act requires large employers to provide health benefits to full-time employees or face financial penalties. This employer mandate, a critical component of Obama’s health care reform, was delayed until 2015 earlier this month.

White Castle employs around 9,600 workers nationwide and about half work full-time. Roughly 80 percent of White Castle’s full-time employees opt in to the company’s current health care plan and the company spends four to five times more in health care than it makes in net income annually, Richardson said.

The company’s high retention rate when it comes to participants in its health care plan is why it assigns such a large value to its increased costs due to Obamacare, he said. White Castle also does not foresee its health care enrollment numbers to go down significantly once Obamacare is implemented.

Many other restaurant chains that also first feared the health law would impose substantial costs on their business have since cut initial estimates, according to the Wall Street Journal. Wendy’s, for example, cut its estimate by 80 percent, citing a belief that employees will opt not to have insurance.

However, White Castle’s policy remains in line with the majority of employers, which say they will not reduce the health benefits or hours of full-time employees after Obamacare is fully implemented, according to multiple recent studies.

How Obamacare will shape future hiring policies remains to be seen, but some have already attempted to rework hiring strategies in anticipation of the new law. In 2012, Darden Restaurants, the owner of Olive Garden and Red Lobster, considered hiring more part-time workers, but opted against doing so after rampant public protest. Earlier this year, Dunkin Donut lobbied to change the definition of full-time to employees working 40 hours per week or more from its current 30-plus hours definition, in order to have fewer workers to insure.

UPDATE: This story has been updated to reflect comments made by Richardson in an interview Thursday.

 

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