Benefits & Compensation News

Olive Garden backpedals on controversial health reform stance

Remember that restaurant chain we told you about that was looking into reducing full-time staff and increasing its part-timers to skirt some of the requirements of the health reform law? Well, it looks that chain has changed its tune already.

According to the Washington Post, Darden Restaurants Inc., the owner of Olive Garden and Red Lobster, won’t be bumping any full-time employees down to part-timers — at least not any time in the near future.

Declined satisfaction, public outcry

Why the change of heart? It looks like a number of factors were responsible for Darden’s 180. As we reported previously, the restaurant chain had been testing the effectiveness of moving full-time workers to part-time status in response to a healthcare reform rule.

Starting in 2014, employers with 50 or more full-time employees must provide healthcare insurance for those workers — or pay a penalty.

Last February, Darden ran tests in four markets where the company would hire more part-timer workers and replace full-time employees who left with part-timer staff. In some situations, the company also reportedly told managers to make sure part-time workers were given no more than 30 hours in a workweek. No stats were released on just how many Darden restaurants were used in the test.

Now, it looks like the results weren’t quite what the restaurant company had hoped for.

When the tests were first reported back in October, the organization was bombarded with negative feedback from customers via its website, social media sites like Facebook and its physical restaurants.

The results of Darden’s internal surveys also showed a drop in both employee and customer satisfaction in establishments where the tests took place.

So just how bad were the results of these surveys? Bob McAdam, the head of government affairs and community relations for Darden, refused to give any specifics, but he did say the satisfaction drop was “enough [for Darden] to make a decision.”

McAdam added, “What that taught us is that our restaurants perform better when we have full-time hourly employees involved.”

Despite Darden’s recent reversal, the company hasn’t ruled out using more part-time workers down the road.

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