Olive Garden, Red Lobster Scale Back Employee Work Hours to Avoid Paying for Health Insurance

Darden Restaurants Inc., the parent company of popular casual dining establishments such as Olive Garden, Red Lobster, and LongHorn Steakhouse, is no longer offering full-time work schedules to employees at "a select number" of restaurants in four markets across the country.

Though details were scant, the company did say there were no immediate plans to expand the "test," which is aimed at "help[ing] us address the cost implications health care reform will have on our business."

Starting January 2014, when most major provisions of the Affordable Care Act go into effect, companies with over 50 employees will be required to provide health insurance to employees working over 30 hours a week. Companies that flout the law will be fined $3,000 per uncovered employee.

"I think a lot of those employers, especially restaurants, are just going to ensure nobody gets scheduled more than 30 hours a week," Matthew Snook of the human-resources consulting company Mercer told the Orlando Sentinel.

Jumping the gun, Darden said in its statement that employees at restaurants where the pilot program was put in place will be limited to 28 hours a week.

A recent study by the nonpartisan Urban Institute found that companies with over 1,000 employees will only experience a 4.3 percent increase in overall spending due to added healthcare costs. Currently, some 75 percent of Darden's 180,000 employees are already working exclusively part-time and are not eligible for benefits.

Darden, which, ironically, bills itself as "the world's largest full-service restaurant company," made headlines last year when it started a "tip sharing" program requiring the waitstaff to share its tips with all other employees. According to the Associated Press, "That allows Darden to pay more workers a far lower 'tip credit wage' of $2.13, rather than the federal minimum wage of $7.25 an hour."

[photo via AP]