Papa Johns & Applebee’s cutting hours and laying off employees to deal with Obamacare Costs

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In the wake of President Obama’s reelection, one CEO is taking actions after his criticisms of Obamacare.

Papa John’s CEO John Schnatter said he plans on passing the costs of health care reform to his business onto his employees. According to the Naples News, Schnatter said he is considering reducing workers’ hours, as a result of President Obama’s reelection. Schnatter made headlines over the summer when he told shareholders that the cost of a Papa John’s pizza will increase by between 11 and 14 cents due to Obamacare.

“I got in a bunch of trouble for this,” he said, referring to the comments he made in August, according to Naples News. “That’s what you do, is you pass on costs. Unfortunately, I don’t think people know what they’re going to pay for this.”

Schnatter went on to say he’s neither in support of, nor against the Affordable Care Act, even admitting that “the good news is 100 percent of the population is going to have health insurance.” But he’s not the only one in the chain restaurant industry to admit that workers hours may be reduced, since Obamacare mandates that only employees that work more than 30 hours per week are covered under their employers health insurance plan. For example, Darden restaurants, the parent company of Olive Garden and Red Lobster, has already experimented with reducing workers hours in anticipation of the legislation.

Others have responded to the added costs of Obamacare more harshly, including Applebee’s which has said it won’t hire new workers because of the law. Just this week, a Georgia business owner also claimed he cut employees due to Obamacare and in fact had specifically laid off those who he thought had voted for President Obama.

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35 COMMENTS

  1. Let’s see….pizza going up 14 cents so that employees can have health insurance. I’m sure that much of an increase in price will bring a stop to all pizza sales. In a pizza joint, likely most of the employees are teens who are covered under their parents plans. And in my opinion, restaurant workers who survive on tips are a segment of the population that should really benefit from the ACA. I am amazed at this hand wringing. Sure is good publicity though. Gets the name of your business out there, for better or worse.

    • When I was in the pizza biz, I hired employees from national chains to learn the “tricks of the trade” so to speak. One thing I learned was that a very well known national chain had a computer program that detailed for the store manager running percenages for labor and product costs. When the labor cost percentages exceeded the specified cap, the manager would send an employee home mid-shift. When the food cost percentage exceed the prescribed cap, the manager would order staff to cut back on pizza toppings until the percentage fell below the cap.

      For example, if the manager authorized a 10-pizza donation to a youth ball league team, the next 100 pizzas would receive a 10% reduction in pizza toppings. If someone slid a couple of freebie pies out the back door, same thing, the next 20 pizzas sold to the public would be shorted on the toppings to pay for the free pies to friends.

      You got any idea how many free pizzas go out from certain national chains? Plenty! I’m sure Papa Johns, or any other national chain, has the ability to shave product and pay for employee healthcare coverage.

      • There is no difference between cutting quality to make up a new cost and raising prices. Different sides of the same coin. Or maybe the PJ could just top giving free pies out to the community. Let them buy their own.

        • I think there is a huge difference between cutting quality and raising product price. One gets you a shitty reputation for a chintzy pizza.

  2. What a joke Papa John… 14 cent??? If this affects your bussiness, then maybe you need to take a look at the pizza your serving.

  3. Talk about picking on the little people! This is greed at its worst. How much do you want to bet this CEO won’t reduce his take home pay one cent! Not that these company’s will feel it, but if they pull this type of grandstanding I won’t give them any of my business.

    • Ann,

      The CEO and this company doesn’t owe you jack sh!t. They are employing you, paying you and giving you a job. It’s their right to do what they want with their employees. Don’t like it? Great! It’s a free country. Find a job elsewhere.

      • Joe,

        The employees are also the one guaranteeing that the “job creators” don’t have to get up in the mornings and work for a living. If you think the employers are the ones benefiting from this relationship, I suggest you go back to school.

  4. Thanks for your comment Ann. Let’s all start patronizing the mom and pop pizza parlors. There’s a great one in Newburgh and also one at the north end of Stringtown Road. I am sure there are others too. Let’s hear from the “little guys”.

  5. Let us stand United and BOYCOTT these companies who have unfairly decided to layoff workers because OBAMA won four more years. It’s obviously to sway voters in elections to come. We will not be scared into doing something.
    1.Applebee’s
    2.Papa John’s
    3.Murray Energy
    4.Westgate Resort

    • *major facepalm moment*

      This is just retarded. Boycotting these companies is a great way to put a bunch more people out of work. If that’s your aim, by all means, boycott away, but you’re not going to change the impetus that led them to this decision. Their decisions are business decisions that reflect the changing business landscape. They are not the only companies looking into this. This is what happens when you get a bunch of technocrats in office with good intentions…they unwittingly pave the road to hell by producing unforeseen reactions.

    • I agree. I believe no matter who was elected they would do this. As one poster stated most Pizza Parlors hire teens that are covered under their parents so this is just a scare tactic.

    • Let me give everyone update….My wife is a server at Applebee’s and they are cutting hours to avoid the new laws under government Health care…but they are working with other restaurants to keep their valued employees at a full time by diving the hours between to restaurants…You can’t blame business’s for doing what they got to do….blame yourselves for government control of our lives…this is only the beginning

    • Kroger sure ain’t slacking off opening Ruler after Ruler over here and in Henderson.

      • Think about what you just said… Ruler Foods uses a fraction of the employees a typical Kroger uses. Their business model is changing.

        • Yeah, you’re correct. But I do like Ruler. And Aldi. Still go to Schnucks, but we’ll see what happens first of the year when right-to-work kicks in, and the butchers lose their contract.

  7. These businessmen would not be facing this problem if we would just bring back slavery.
    You didn’t even have to offer health care and your workers reproduced for you to have more workers.
    That way there would not be any more risks for the businessman; except where to keep their money safe from the bankers; and of course chasing those ungrateful runaways.
    All business is risk, just like farming, and taking risks is what capitalism is all about.
    Our labor laws and health care requirements are to protect workers from the kind of quality of life that slaves had.

    • Comparing the modern job market to slavery is just stupid. Your feeble attempt at satire is laughable. Your comment exemplifies this typical class warfare bilge that has become a cancer to rational discourse. In the place of any actual knowledge of how a business is run or how the economy works, you and others like you simply insert some ignorant slogans.

      What you fail miserably to understand are the unforeseen ramifications of this way of thinking – that government is responsible for protecting workers against their “evil-minded” employers who are the “1%ers”. You totally forget that most employers are little people like you and me who run small business. You forget that companies like the above are often owned through public stock by the employees themselves, whose portfolios grow when their business grows.

      You know, insurance companies are huge blood sucking corporations too, far more so than any of the ones mentioned above, but I don’t hear you decrying the financial windfall they are going to get from Obamacare implementation.

      Why on earth would free people need a nanny state to “protect them” from an employer at a job they could simply quit if they didn’t like the wages, benefits, or treatment?

      Are you so much of a pansy you can’t make a decision on your own without mommy and daddy fixing the situation for you?

      You need an actual education. Read some books by Henry Hazlitt or Friedrich Hayek. At least TRY to see the other side of an argument before you make an ass of yourself trying to be cute with sophomoric satire.

      • Yikes, Brad! Methinks you need to stop drinking so much Red Bull prior to posting… 😉

        • No Red Bull was consumed or harmed during the making of my evening’s retorts. Although I will confess I was more or less seeing red.

  8. Try working in a steel mill, a lead refinery or in a coal pit and then talk to me about the poor 1%.
    Watch The great men who made America and then ask who did the actual work.
    You forgot about the risk of running a business.
    Captalism is a rough game. At the top and and at the bottom of the income ladder. At the bottom its a lot less pretty.
    I left out the insurance and banking guys ’cause I did not wish to upset everyone at once.
    Try reading about the Homestead strike and the pinkertons and don’t tell me that those are old stories.
    Check with the widows of the dead and injured coal miners in Kentucky about how those days are gone.
    Business and work are dangerous occupations.

    • You’re all over the shop with your arguments. All you’ve got is some loose idea about corporations being inherently bad or against their workers. No corporation has any incentive in killing off their workforce, or paying out millions in lawsuits to widows because of negligence.

      My whole family are coal miners. Literally. Even THEY understand the company has to make a profit to stay in business. And they especially see the problems over regulation of the mining industry is causing, again by well meaning, but clueless bureaucrats and knee-jerk reactionaries.

      Don’t get me wrong, I agree with you about risk, and I hate crony capitalism with a passion. It is one of our biggest problems in this country, but it’s an ill that is ENABLED by not SOLVED by government. They reward their cronies at the expense of everyone else who wants to compete and they do it with EVERYONE’s money. The biggest recipients of welfare aren’t poor people, they are corporations. That is a fact.

      Don’t make the mistake of thinking I’m just some brainwashed Republican defending corporations mindlessly. That isn’t the case. I’m trying to make you understand the relationship between employer and employee is AT WILL and symbiotic. We should all be free to make contracts with one another and with our employers as we see fit without government intervention. If we don’t like a job, don’t like the hours, don’t like the wages, there is one outstanding recourse that will resolve the problem – quit and seek more suitabble employment elsewhere. That’s that. Why on earth would anyone think the proper thing to do would be to go crying to the frigging government to step in and tell the employer he needs to change his ways? That’s absolutely antithetical to the idea of the American Dream and freedom itself. Eventually, any bad employer would have to shape up or risk being noncompetitive in the job market.

      The ideas you’re espousing are Marxist…and I don’t mean that as a backhanded insult, I mean it as a definition of the philosophy behind what you’re saying. Your ideas are rooted in this belief that a job is a “right” and that the employer should be forced by government to behave in a way that is beneficial to the employees. What you’re forgetting is that s problems resolve themselves through the free market if it’s actually allowed to work.

      • This stupid pansy quits. You win. I now realize that last week was traumatizing and that any idea or view of history, other than yours, is very wrong; and at the very, least socialistic.
        Real American: 1, socialistic pansy 0.

        • About that slavery comment: Yes, slavery was wrong, wrong, wrong! But responsible plantation owners took very good care of their slaves (and I am certain that there were irresponsible slave owners as well). I have in my kitchen hanging on a wall the tray that was used to take medications to my ancestors’ slaves long before the Civil War. The fact that a white family owned them did not necessarily mean that the slaves were treated poorly.

          • This is without a doubt the most socially retarded, anti-humanistic message I have ever seen posted on this Web site.

  11. THESE FOOD SO CALL CHAIN HV LOTS OF MONEY TO PAY THERE EMPLOYEE HEALTH INSURANCE AFTER ALL THEY REALLYNOT PAYING ANYTHING BECAUSE MOST OF THE INSUARANCE THE EMPOLYEE HAVE IT TTO HIGH THAT SOME OF THE EMPLOYEE CAN NOT PAY FOR IT ANYWAY AND THEY ARE CUTTINH THERE HOURS WELL LET ME TELL YOU ALL SOMETHING THIS HOUR THING BEEN GOING ON SINCE 1976 WHEN BUSINESS IS SLOW THEY CUT YOUR HOURS AND THEY TRY TO HURRY YOU WITH YOUR WORK TO CUT COST DURING PRODUCTION TIME SO DO NOT PUT THIS ON OBAMA CARE YOU ALL BEEN DOING THIS IN 1975 IT ABOUT HATE FOR OBAMA YOU ALL JUST NEED TO CUT THE KRAP AND GET BACK ON YOUR FEET AND STOP LYING YOU HAVE ALWAYS CUT HOURS AND LAY PEOPLE OFF DURING SEASON AND DO”T HIRE ANYBODY AND I AM ONE OF THEM TELL THAT TO SOMEBODY AND THATS YOURSELF.

    • WTH! How can ANYONE read or understand this post! Just looking at this, one wonders how an individual who writes or speaks like this can find ANY job!

      • Yes, your right. Everyone just hates Obama because he is black. All of the businesses are making drastic changes and some are shutting down just to fake it that Obama’s plans are messing up American free enterprise system!

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