Companies Lay Off Workers, Cut Hours to Avoid Obamacare

To avoid a legal obligation to pay employee healthcare costs, employers are cutting hours – and jobs.


Because Obama was re-elected – and perhaps because there is now virtually no hope that healthcare reform will be reversed – some businesses are throwing people overboard.

The Washington Post reports Murray Energy, the largest private coal company in the U.S., is laying off more than 150 people. Papa John’s CEO John Schnatter is saying franchises will probably cut employee work hours below 30, the threshold where the law requires coverage. Schnatter says the healthcare law may cost the company $5 to $8 million a year. (Meanwhile, the company is currently giving away 2 million free pizzas.)

Applebee’s is considering a hiring freeze. Darden Restaurants, which owns Olive Garden, Red Lobster and Longhorn Steakhouse, is also considering cutting employees to part-time – even as it faces lawsuits arguing the company doesn’t pay minimum wage.

Stacy Johnson

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