Florida restaurateur John Metz, who operates about 40 Denny’s locations and five Hurricane Grill & Wings franchises across Florida, Virginia, and Georgia, says that he will be adding a five percent surcharge to customers’ bills to help offset the cost of the Affordable Care Act (i.e. “Obamacare”).
“People are trying to find ways to avoid the penalties and to avoid having to pay for ObamaCare,” John Metz told FoxNews.com. “Everyone’s looking for a way to not have to provide insurance for their employees. It’s essentially a huge tax on all us business people.”
But that’s not all.
As CEO of RREMC Restaurants, LLC, Metz says he will also have to slash the hours of roughly 1,200 employees to fewer than 30 hours per week.
He will make the announcement next month.
“I want to explain it to everybody, to let them know what’s coming down the pike,” he said. “We like to keep our employees informed.”
The changes will no doubt force some of his employees to look for a second job, FoxNews.com notes, but Metz maintains that he has no other choice.
“It’s a great concept,” Metz said of President Obama’s landmark healthcare law. “We want to have everyone insured. The problem is, who is going to pay for it and how are we going to accomplish this?”
And just in case you don’t remember some of the “finer” details of “Obamacare,” here’s a refresher:
Under the current law, employers with more than 50 full-time (or equivalent) workers will be charged a penalty for the number of employees exceeding 30 full-time staffers who are not covered.
With an average of 35 full-time employees per location, Metz said the $2,000 penalty would total roughly $70,000 per restaurant. Current coverage costs Metz up to $6,000 annually per full-time employee, he said. He currently provides coverage to about 250 employees.
“It’s going to be a big issue for all of us -- for my employees and for me,” said Metz. “The ones that are working more than 28 hours, they’re going to act as if I’m cutting their hours and they’ll have to find another job.”
Metz is probably correct when he says other restaurants will adopt to his policies -- that is, adding surcharges and slashing hours.
“That is what I foresee and that is the easier, least painful way to deal with these added costs,” he said. “In a true playing field, everybody will impose this, from McDonald’s to Denny’s to even maybe the fine dining restaurants in order to have the funds to be able to pay for either insurance or the penalty for not providing insurance to their employees.”
Metz has encouraged his staff to contact their elected officials to see if there are other ways in which the costs of implementing “Obamacare” can be offset.
“It’s never good news, but it is what it is,” Metz said in reference to his five percent surcharge. “We really should look for a better or different way to pay for [ObamaCare]. I think what we’re going to ultimately see here is a European-type system where we have a value added tax or a national sales tax.”
“I have a choice: try to live within the rules, or go out of business,” he added.
While Metz claims that he has no other choice but to add surcharges and slash hours, and that he believes others will follow suite, the National Restaurant Association claims that is “premature” to try to assess the financial burden “Obamacare” will put on businesses.
Here is the statement they sent to FoxNews.com:
We have warned for some time that the mechanics of the health care law are very difficult for the restaurant industry, which is a low-margin industry that works to keep costs down in order to provide value to customers.
All costs, from gas and commodities to labor and insurance, eventually impact the price on the menu. It is important that operators get very familiar with the provisions of the law and start planning for its implementation; however, it’s premature to make a specific assessment of exactly how the law will affect any individual business because there are so many details that are unknown.
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All photos courtesy the AP.