Denny’s Pancakes With a Side of Obamacare Tax? Not Yet

By Kyle Blaine

Nov 15, 2012 3:15pm

Fans of the Grand Slam breakfast, fear not. The Denny’s franchise owner who told a reporter that he would be adding a 5 percent “Obamacare” surcharge to diners’ meals has walked back that statement.

John Metz, who owns around 40 Denny’s and multiple Dairy Queen Locations in Florida, as well as a franchise called Hurricane Grill & Wings, made news and ruffled diner food fans’ feathers when he told the Huffington Post that he planned to add a 5 percent surcharge at the start of next year in addition to cutting back some full-time employees to part time.  His reasoning, he said, was that the measures are necessary to offset the costs of the Affordable Care Act, which goes into full effect in 2014.

But now representatives for Metz are walking back those statements, telling ABC News in a statement that while Metz will cut back hours his employees work, the 5 percent surcharge was merely speculation, and never was his actual intention.

“Hurricane Grill & Wings will be implementing the 28 hour [maximum hour] rule in all corporately owned and operated restaurants starting in Q1 of 2013. The 5 percent surcharge mentioned in various online outlets is pure speculation and only a potential option should the law be re-written to include full-time equivalents,” the statement read. “The surcharge is not to be implemented or considered at this time.”

ABC News was denied a request to interview Metz.

The Affordable Care Act states that employers who do not provide health insurance but have over 50 full-time employees will be charged a penalty for every employee above 30 full-time employees.

Metz is not alone in promising to cut back on workers’ hours as a way of avoiding this provision.  He joins employers such as Papa John’s, Apple-Metro, Jimmy John’s and Darden restaurants, all of which have already announced plans to cut back the number of hours certain employees work.

Yet how the ACA would impact  the restaurant industry – whether in decreased profits, increased prices or lower wages for employees – has yet to be fully determined.

“The market is going to ultimately decide how the restaurant industry absorbs this penalty, and no one entrepreneur is going to affect how that occurs,” said Bruce Vogel, associate professor in the Department of Health Outcomes and Policy at the University of Florida. “It’s a competitive market, and he’s a pretty small player in a relatively large market, he’s probably going to backtrack pretty quickly.”

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