White Castle VP talks part-time workers in response to healthcare law

As President Obama’s healthcare law rolls out in the coming years, business owners are figuring out how they will comply with coverage mandates.

One popular restaurant chain, White Castle, may in the future hire only part-time workers once the law is fully implemented, according to Vice President Jamie Richardson.

Richardson told NPR in an interview that the company is trying to figure out how to keep costs down.

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“If you’re full-time at White Castle, you’re going to stay full-time at White Castle,” he said. “But as we look to the future, when the new healthcare law takes effect, we are considering at that point, for new hires, letting those people know upfront, ‘Hey, at this point we’re only able to hire part-time team members.’ ”

White Castle has about 9,600 employees, and roughly half of those are full-time, according to the company.

[Updated July 26 at 7:15 a.m.: In a statement to The Times, Richardson said he projects that the Affordable Care Act will cause the company’s insurance costs to rise 35%.

“We remain committed to offering health insurance -- and the best benefits possible to the greatest number of team members,” he said. We “hope that Congress can act to address the issue of 30 hours per week becoming the new definition of full time -- a provision of the Affordable Care Act.... It’s bad for employees and employers and we’re hopeful the extra year before implementation will allow time for Congress to act.”]

The restaurant industry, which relies heavily on part-time workers, has been grappling with how staffing will change once the healthcare law coverage mandate kicks in. Earlier this month, the Obama administration announced it would delay for a year the employer medical insurance mandate, saying businesses needed extra time to understand the complicated plan.
But even before the delay, some prominent restaurant executives said they expected businesses to cut worker hours.

John Schnatter, chief executive of Papa John’s, said it would be “common sense” for franchisees to place more workers in part-time positions.

Schnatter’s comments were not well-received, particularly after he said pizza prices at his chain could rise up to 20 cents per order due to increased healthcare costs.

The owner of Olive Garden and Red Lobster restaurants, Darden Restaurants, conducted an experiment last year to see how part-time staffing would affect operations. In December, executives decided to nix the plan, which they had tested out in four markets across the country.

Clarence Otis, Darden’s chief executive, said then: “Although our workforce historically has been heavily part-time, we have always had a significant number of full-time employees and they are integral to our success. The data we have collected during our test around guest satisfaction and employee engagement has only reinforced this.”

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ricardo.lopez@latimes.com