Darden Restaurants Cut Hours to Save on Obamacare

Obamacare forces restaurant owners to take a long, hard look at rising labor costs
Angela T., a server at Red Lobster

Darden Restaurants, a conglomerate which includes brands like Red Lobster, Olive Garden, LongHorn Steakhouse, Capital Grille, and more, serves more than 400 million meals a year in more than 2,000 restaurants. More importantly, they employ more than 180,000 people — many of whom are going to have their hours cut in response to the Patient Protection and Affordable Care Act (also known as Obamacare).

Under these new policies, companies of a particular size must provide health care for full-time workers or face being fined by the government. Low-wage industries such as hospitality typically don’t offer health benefits with jobs, so this added labor cost can’t be insignificant.

To cope, Darden is transferring employees to part-time status by cutting hours to less than 30 per week, wlwt.com reports. Currently, 75 percent of Darden's workers are part-time, but they say the change is only being implemented in four test markets across the country.

Darden certainly isn’t the only restaurant group — or company in general, for that matter — looking at cutting hours as a solution to rising costs. It remains to be seen what other unintended consequences will unfold as Obamacare comes into effect.

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