Published November 15, 2012
Get ready to pay more for your Grand Slam.
A Florida restaurateur who operates roughly 40 Denny's locations and five Hurricane Grill & Wings franchises throughout the state intends to add a 5 percent surcharge to customers' bill to offset costs for Obamacare in January 2014 when the Affordable Care Act is fully implemented.
"People are trying to find ways to avoid the penalties and to avoid having to pay for Obamacare," John Metz told FoxNews.com. "Everyone’s looking for a way to not have to provide insurance for their employees. It’s essentially a huge tax on all us business people."
To further offset the costs, Metz, who oversees roughly 1,200 employees, said he will also slash most of their hours to fewer than 30 per week. That change will be announced to employees next month, he said.
"I want to explain it to everybody, to let them know what’s coming down the pike," he said. "We like to keep our employees informed."
The changes will force some front-of-the-house employees to look for second jobs, Metz said, but he simply cannot afford the penalties associated with Obamacare.
"It's a great concept," he said. "We want to have everyone insured. The problem is, who is going to pay for it and how are we going to accomplish this?"
Under the current law, employers with more than 50 full-time (or equivalent) workers will be charged a penalty for any employees over 30 full-time staffers who are not covered. With an average of 35 full-time employees per location, Metz said the $2,000 penalty would total roughly $70,000 per restaurant. Current coverage costs Metz up to $6,000 annually per full-time employee, he said. He currently provides coverage to about 250 employees.
"It's going to be a big issue for all of us – for my employees and for me," he said. "The ones that are working more than 28 hours, they're going to act as if I’m cutting their hours and they'll have to find another job."
At Denny's restaurants operated by Metz, the average check is $9, he said, meaning the Obamacare surcharge if implemented would be 45 cents on that bill. At Hurricane Grill & Wings locations, where the average bill is $14.50, the surcharge would total 72 cents.
Metz said he believes the entire restaurant industry – even high-end locations – will ultimately embrace the idea.
"That is what I foresee and that is the easier, least painful way to deal with these added costs," he said. "In a true playing field, everybody will impose this, from McDonald's to Denny's to even maybe the fine dining restaurants in order to have the funds to be able to pay for either insurance or the penalty for not providing insurance to their employees."
Metz is also urging his employees to consider contacting their local elected officials in hopes of finding another solution to offset his looming increased costs.
"It's never good news, but it is what it is," Metz said of increasing customers' checks. "We really should look for a better or different way to pay for [Obamacare]. I think what we’re going to ultimately going to see here is a European-type system where we have a value added tax or a national sales tax."
Metz continued: "I have a choice: try to live within the rules, or go out of business."