Regal Cuts Worker Hours, Blames ObamaCare
America's largest theater chain has slashed the hours of thousands of workers to stay under the ObamaCare threshold.
America’s largest theater chain has slashed the hours of thousands of workers to stay under the ObamaCare threshold.
Fox News (“Nation’s biggest movie theater chain cuts workweek, blaming ObamaCare“):
The nation’s largest movie theater chain has cut the hours of thousands of employees, saying in a company memo that ObamaCare requirements are to blame.
Regal Entertainment Group, which operates more than 500 theaters in 38 states, last month rolled back shifts for non-salaried workers to 30 hours per week, putting them under the threshold at which employers are required to provide health insurance. The Nashville-based company said in a letter to managers that the move was a direct result of ObamaCare.
“In addition, some managers have requested guidance on what they should tell those employees negatively impacted and, at your discretion, we suggest the following,” read the memo obtained by FoxNews.com. “To comply with the Affordable Care Act, Regal had to increase our health care budget to cover those newly deemed eligible based on the law’s definition of a full-time employee.”
“To manage this budget, all other employees will be scheduled in accord with business needs and in a manner that will not negatively impact our health care budget,” the message continues.
Regal, which had revenue of $2.8 billion in 2011, is the latest company to respond this way to the Affordable Health Care Act’s requirement that employees at companies of a certain size who work more than 30 hours per week be provided health coverage. Applebee’s and Olive Garden also scaled back the hours of workers. A handful of colleges have cut hours because of the law, including Palm Beach State College in Florida and New Jersey’s Kean University. Critics say the law is boomeranging on working folks.
The manager told FoxNews.com ObamaCare has had the unintended consequence of taking food off his table.
“Mandating businesses to offer health care under threat of debilitating fines does not fix a problem, it creates one,” he said. “It fosters a new business culture where 30 hours is now considered the maximum in order to avoid paying the high costs associated with this law.
I don’t have any great insights into the theater business but presume it’s rather low margin. Despite skyrocketing ticket and concession prices, they’re not making a lot of money on any individual customer. And they’re competing against all manner of in-home movie watching experiences; I seldom have an urge to see a film in the theater these days. So, it strikes me as plausible that they can’t easily afford to provide healthcare benefits for incredibly low skilled employees.
On the other hand, it’s hard to believe that their employees weren’t already being “scheduled in accord with business needs.” They run 500-odd theaters; I can’t imagine that they don’t have those needs calibrated pretty tightly. Which means that, if thousands of people were working 40 hours a week, they needed thousands x 40 hours of staffing to run their business. So, they’re either cutting staffing below what they need to run their business or they’re hiring a bunch of new 29-hour employees to make up for these cuts. And that ain’t cheap: there are search costs, training costs, and turnover costs. One would imagine that 29-hour employees getting no benefits are less likely to stay employees than 40-hour employees with free healthcare baked into the deal.