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Taco Bell Franchise Cuts Worker Hours to Avoid Giving Them Health Coverage Under Obamacare

Scott Keyes
Think Progress / News Report
Published: Tuesday 8 January 2013
Taco Bell saw a banner year in 2012, with its parent corporation enjoying a 73 percent jump in profits in the beginning of the year and an additional 23 percent increase later in the year.
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A Taco Bell in Guthrie, Oklahoma is cutting all its restaurant workers’ hours to part-time in order to skirt federal law requiring them to provide health insurance for employees.

Nearly 20 employees work for this particular Taco Bell franchise. They were informed just before Christmas that everyone’s hours would be cut to 28 hours or less per week because the owners disliked the Obamacare requirement that large companies had to help provide health coverage for workers.

Among those employees affected is Johnna Davis, a single mother of three who relied on her full-time hours to support her family. News 9 has more on her struggle:

Johnna Davis has worked at the Taco Bell in Guthrie since September. She’s seen a 200 dollar cut in her paycheck since a new store policy went into effect.

“What we were being told was one thing, and that was, ‘we’re going to offer benefits, we’ll just keep all of our full time employees and then come December, their whole story changed,” Johnna Davis said. [...]

Now this single mother of 3 is looking for a new full-time job. Nearly 20 employees their have seen their hours cut.

The Guthrie restaurant is owned by a Missouri-based company named Treadwell Enterprises, which told News 9 that it would allow supervisors and managers to work full-time, but not workers.

Taco Bell is not a struggling brand scraping by to make ends meet. The company saw a banner year in 2012, with its parent corporation enjoying a 73 percent jump in profits in the beginning of the year and an additional 23 percent increase later in the year.

Other restaurants have attempted this ill-conceived move as well. This fall, when a Denny’s franchise announced it would cut its workers’ hours to avoid the health care law, the corporate office distanced itself from the move. Similarly, when Darden Restaurants, which includes Olive Garden and Red Lobster, looked to cut hours, the public backlash resulted in a hasty 37 percent drop in profits. Other restaurants have attempted (and mostly retracted) the same ploy, including Papa John’s and Wendy’s.

Call for comment from Taco Bell’s corporate offices was not immediately returned.

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ABOUT Scott Keyes

Scott Keyes is an investigative researcher for at the Center for American Progress Action Fund. Scott went to school at Stanford University where he received his B.A. in Political Science and M.A. in Sociology. He has appeared on MSNBC and TBD Newstalk TV and been a guest on many radio shows. His writing has been published by The Atlantic, Politico, the Christian Science Monitor, and the Chronicle of Higher Education. Scott comes to DC from southwest Ohio, a state very near and dear to his heart.

@Mr Anon E Mouse I can see

@Mr Anon E Mouse
I can see you are a negative thinker, I guess since you probably being living in a cave lately, and unclear about the conditions of our economy. Not everyone that takes a job in fast food is unskilled, in fact, I completely understand with fewer jobs, many wonderful workers, that have great work ethics are working in the industries. Refrain from putting people down, that is what our biggest problem is here today, So many negative, uncaring, greedy, close minded people. JS Taco bell and others should consider making good honest workers full time regardless of obamacare... Regardless of which, I am not in favor of the health care bill, I hope soon it will be done away with to help all people. However until than do not frown on the people that makes your business and you profit, we did not do it, we just at the bottom without no voice, hope these companies feel the pain they cause, and have a heart, I am sure it could be a way to keep all in harmony..... @Mr Anon E Mouse since your comment, I would ask a good solution to compromise and meet both the companies and employees' interest. Please instead of complaining, think, write and let's all stand together to help make things right......

There is a flaw in the new

There is a flaw in the new law and companies are using this loophole to save shareholder companies always do. Profits are more important than the workers to modern companies.

McDonalds does the same thing. Likewise PapaJohns and probably most companies who can easily replace workers and hire them part time.

Many McDonalds are private owned franchises. Most probably have no shareholders but still choose to place profits first. A friend who works at a local MickyDee's has had her hours cut to avoid paying for health care. She did not have care before anyway, unless she paid for it. So the result of the new law is not turning out to be more health care but lower income.

UPS, FedEx and other companies found that by hiring drivers as independent contractors who "rent" their truck from the companies are not entitled to benefits either.

Where there is a loop hole, companies use them. It sadly, is the American Way of doing business.

Where is your outrage for the

Where is your outrage for the foriegn sweatshops. Easy to be indignent regarding some "corporation". We are fools and the rest of the world is eating our lunch. We have thousands of great "corporations", great employers, who many of you ragers put in jepordy every day by buying foriegn goods made in near slave conditions. Again we have have met the enemy and he is us.

It is time to boycott all

It is time to boycott all these greedy corporations! We could stand strong as a nation if people would eat healthy (organic not GMO's), get up off their butts and take back their responsiblity to "do the right thing". If these corps keep us poor, sick, uneducated and disarmed, they WIN, and we are letting them!!!

It's Oklahoma - what do we

It's Oklahoma - what do we expect???

Its everywhere....

Its everywhere....

Just putting this out there:

Just putting this out there: I work for IKEA part-time. I average around 20 hrs/week. I get the SAME health benefits as a full-time employee - only difference is I am not eligible for long-term disability. So it is completely plausible to be a mass volume retailer, turn a profit AND treat your employees well. Acting like this is the end of the world for them is shameful.

F#@K Taco Bell!!!!!

F#@K Taco Bell!!!!!

I would seriously like to

I would seriously like to understand why people are not standing outside Taco Bell protesting the people that buy food there. That is your prime target. The people that buy the food there not only contribute to what you think is something evil, but they are also responsible for the need for your socialized medicine. They are on their way to diabetes land by eating high fat and sodium foods, followed by thousands of empty high fructose corn syrup calories. Why don't you complain about them? It is their money that feeds the demon! It is their decisions that will cause you to pay more money in taxes to support their addiction at Taco Bell.
Taco Bell is not the problem. You are the problem because you are fighting the wrong enemy.
Perhaps if the US wasn't the fattest f***ing country on the planet (even our poor and "malnourished" are fat!) our health care system wouldn't be such a disaster.

Maybe instead of complaining how bad the Big Evil Corporations are you should be complaining about how people who are lazy about their food choices are costing you thousands of dollars a year for their healthcare. Think about that. Every McBurger they eat, every taco they stuff down their fat throat is costing you money.

Yeah, Taco Bell is the problem. Walmart is the problem.

Wrong. Eat healthy food and exercise. It is your life.

Oboma Care is is the most

Oboma Care is is the most expensive health care of all the major nations of the world and is also has the poorest care. It is also forbiden by law to even try to necotiate lower prices with big pharma. No wonder these companies are doing all they can to avoid Obama Care. I am retired so I have little leverage to control cost.
I think most of the world knows single payer plans are the best and lowest in cost. Yet our leader, Obama, was easilt sold on multi-payer plans so complicated that I can't figure them out. It looks like it will boil down to the choice of treatment or no treatment and suffer the consequences. Thank you voters for re-electing Oboma as our president who has not even tried to remedy the largest problem of the world and mankind--global warming which is controlled by physics who doesn't listen to politicians.

Written by someone who does

Written by someone who does not understand the law. Most of what you stated is not fact but fiction.

Is our care too costly? Yes but it has always been that way and Obama care did not make it costly...big insurance companies did that long ago.

Obama care's failing is in not providing a single payer system that has lowered cost in other nations. Instead it is just a set of needed regulations on health insurance, not on health care.

We still do not have a "health care" system in America as do other nations, all we have is some more rules to protect consumers from some of the worst practices of an Insurance System.

It is a small step in the right direction. It will take time.

Under Obamacare not only were

Under Obamacare not only were hours cut, but now they'll have to provide health insurance for themselves and their families with reduced hours, or be harassed, and fined by the IRS, how does that work?

More misunderstanding.

More misunderstanding. Yes..this is a loop hole to avoid buying what they never provided in the first place. But at least if you are underpaid you can get health care you could never afford before the new law.

Most of these employers never provided health care before. McDonald's often made a plan available to part time workers but you had to pay 100% of the premiums yourself then too. No one I know earning fast food wages could afford it.

Also you could be denied for pre-existing conditions or cut off if you really got sick.

Here's how it works. Under

Here's how it works. Under ObamaCare, the American People are getting screwed. Remember, Quinn's first law of liberalism: "Liberalism always produces the exact opposite of. It's stated intent".

Medicare for ALL. NO MORE

Medicare for ALL. NO MORE Taco Bell for me. Record profits aren't enough. The GREEDY always want more.

A single payer system would

A single payer system would solve many issues in Obama Care. It was preferred but considered impossible to achieve with our Congress.

We got a compromise as always. The terms of the compromise was dictated by lots of special interest money that did not care one bit about the good of the people. But it is a small start.

"The greedy always want

"The greedy always want more". That's true especially when they are greedy politicians; they want more of your rights, power and freedoms. That's what ObamaCare is all about. You Ain't seen nothing yet. Wait until this liberal bunch in Washington get through. Welcome to third world America!

You are correct however you

You are correct however you place the blame of greed in the wrong place.
Politicians need lots of cash to get elected. The real greed is in the hands of the few very rich who demand special protection from regulation and taxes and buy those politicians.

If we had a better system of elections we could cut out the influence of those wealthy special interests and put the American people back in the drive seat with politicians obligated to us instead of the 1% with all the cash.

Here is one of my articles:

This is obviously a political

This is obviously a political action of the local tea-partier, Obama/Obamacare hater, Redneckistan, franchise owner of several Taco Bells. We can only hope that the local patrons see it as yet another boss trying to cheat his employes and boycott him en masse. It appears to have worked as others who have tried it, saw their business drop off as much as 37% then, quickly backpedaled.

fastfreddy56's picture

I agree, national boycott -

I agree, national boycott - even if that meat stuff they use tastes good, if they aren't able to manage a profitable business that provides fair employee benefits they should not be in business. I agree it's likely a POS TeaParty antic.

Keep in mind these companies

Keep in mind these companies did not cut health care benefits. Except for management who are full time, they never provided health care in the first place or they would not be cutting hours to avoid cheaper health care. What they are doing is cutting hours ( bad enough ) to avoid providing something they never provided in the first place.

My thinking is that anyone involved in food service should be required to provide health care. Remember, these people prepare and serve the food you and I eat.

Do you really like the idea they often come to work with illness because they cannot afford to miss pay or go to a doctor?

Why is health care tied to

Why is health care tied to employment, why is it the employers responsibility and not the govermanet's . seems crazy that we tie it to employment and allow various rules that make no sense, and an independant business person cannot deduct the full cost of health care. I hope everyone who advocates a boycott also completely boycotts products made in China, Pakistan, and other areas where workers health care coveage is nearly non existent. We seem to want jobs we just do not want comapnies, we want cheap fast food and low cost products, and we want to kid ourselves that these are happening without explotation of workers, No self sacrifice is too small for us to deny making it.

Employers should not be

Employers should not be involved with health care. Medicare for all NOW.

That's right! Neither should

That's right! Neither should government! Get the government completely out of the health care business. Obama and the liberals in Washington are hell bent on destroying the finest healthcare system in the world. Check out government healthcare systems in others countries; they are costly and inefficient. If you think healthcare is expensive now, just wait until it's free. I'm going to Taco Bell!

More ignorance. First

More ignorance. First Medicare & Medicaid is government insurance, not health care.

Except for our one Socialized Single Payer Medical System ( VA Hospitals ) health care is provided almost entirely by private source, not by government. ( there are some local funded government run clinics scattered around the nation )

People keep forgetting that we don't have government health care in America ( except the VA ). What we have is a somewhat better regulated insurance industry.

Your tweet has too many

Your tweet has too many characters.

I agree with RANDY, time to

I agree with RANDY, time to do a nation-wide boycott of Taco Bell as well as the others listed. If they want us (taxpayers) to foot the emergency room care for their employees then they (corporation) should endorse and finacially support single-payer healthcare.

The employer just wanted to

The employer just wanted to cut back on their hours. You have to have at least 50 full-time employees to be required to provide insurance, and small businesses received tax credits to help them with the expense. This owner is just greedy and looking for a way to cut costs and keep more in his pocket.

I wonder whether any of these

I wonder whether any of these companies have actually bothered to produce documentation for the affected employees substantiating their claim that they can't afford to do what the law requires? I'll bet they haven't, because it isn't true. What a selfish, mean-spirited thing to do.

We need some clarification on

We need some clarification on this. How many employees does the franchise owner have for all of its holdings? Does the law requiring healthcare for companies with at least 50 employees apply to the total
employees of the holding company or does it apply to each individual holding (franchise)?

Amen to the earlier posts.

Amen to the earlier posts. I have never spent one dime at Wal-Mart and hopefully never will. As for Taco Bell, et. al., same story. I can live quite well without enriching them. When, and if, they decide to become good citizens, I might re-think my position. Until then, I'll deal with considerate, caring, unionized shops.

That's it. No more Taco Bell.

That's it. No more Taco Bell. We tend to get it at least once or twice a week - spent about $30. No more. If Taco Bell won't support it's workers, we don't support Taco Bell.

As for Wal Mart and their "setting the example" - I do more and more alternative shopping to avoid them. Used to drop anywhere from $300-$600 per month because could get almost everything in one trip so it was convenient. Now I shop sites like - same prices, but free shipping and no sales tax - because of WM's treatment of their workers. While the Walton's build a massively expensive museum in tribute to themselves - they continue to screw their empl0yees. It was one thing when old Sam was building the business, but there's no explanation for it now, other than pure greed. Recently went thru one of their lines and the checker had badly lacerated her arm on a screw hanging out of a cooler when she was stocking it. I mentioned she ought to be sure to get a tetanus shot; she told me she had. So I asked if WM paid for it - she paid for it herself...

Perhaps if the family would try working at one of their stores for a month, they'd see things a little differently. As it is, their simply leeches sucking the life out of millions of hardworking people, giving back nothing. Their employees EARN their pitiable wages - as do the Taco Bell employees. I'd like to know how much of the $205 billion "pie" Boehner, Biden and Obama gave away in corporate subsidies in their "fiscal cliff" bill will go to Taco Bell...

For health reasons it is a

For health reasons it is a good choice! However you have to stay away from ALL restaurants, fast food and otherwise, because almost none ever provided health insurance in the first place...and most cut hours in order to avoid doing so in the future. McDonalds, Burger King, Arby's, Papa Johns. They all are doing the exact same thing all over the country.

Don't single out TacoBell unless you are ready to avoid all of them and just eat at home. (oh, yea, chances are your grocery store will also cut hours and hire more part time to avoid the same )

It is a flaw in the notion of the new law that companies who could now afford health care for all workers who never had it before, would do so. They won't.

The thing is, this isn't Taco

The thing is, this isn't Taco Bell, the corporation, but a local franchise. Do they even have enough employees to require them to pay health benefits? The employees need to launch a local campaign to see this franchise and any other local businesses owned by them boycotted. The days when we could sit comfortably back on our asses and wait for someone else to make a difference are gone. It's up to us now.

You are correct. Most are a

You are correct. Most are a franchise. But they never provided care in the first place. This is a loophole to keep denying coverage. They won't really save money because they still need the same number of warm bodies to do the work, they just hire a few more part time and still no one gets health care on the job.

Wal-Mart has been doing this

Wal-Mart has been doing this for some time. Best way to deal with it: don't apply for a job their and take your business elsewhere.

One is certainly not depriving oneself of anything by avoiding "fast food".

This certainly bears

This certainly bears repeating over and over. Why do people complain so much about how a private enterprise wants to run their business. This is America where you vote with your wallet. Stop complaining, people. Don't spend your money there. If you have a job somewhere that sounds like flipping hamburgers or organizing boxed goods, please realize this: you need them more than they need you because your skillset is owned by just about everyone on the planet. You are not special because you can flip a burger. You are at pretty much the lowest place on the job totem pole. So, if you expect to be "cared" about, stop fooling yourself. You are owed nothing because all you are doing is flipping a burger. That said, your job while flipping a burger is to learn everything you possibly can about how that business operates. If you are lucky, someone will recognize that you have done so. If you are not lucky (which means you have not worked hard enough at it), you will not be recognized for your service and you will promptly take that experience somewhere else, like to a competitor or, since this is America, to start your own business. When you do happen to start your own business, please remember just how you felt about things when you were an employee because as soon as Uncle Sam starts taking all of his money before you see a dime of it, just remember how unfair you though it all was and how greedy these corporations appeared to be. Then you will realize that in order to grow your business you need to make huge profits (in order to hire another person you need to make enough profit to hire them, plus additional revenue for growth, right?) and that every time you do you have to give Uncle Sam some more money, plus your lawyer, plus your accountant, plus the local, state and federal filing fees, levies, taxes and other expenses necessary to run a business. Then, finally, when you get your paycheck from owning your own business you soon understand why Walmart is the way it is and why Taco Bell is the way it is: it is there to make money and grow. It is not there to provide social services for low effort, low skilled employees. That is not in its corporate charter, and it certainly will not be in yours.

It should be required that all whiners about socialized medicine should take some basic business and economics classes.

The great thing with all of

The great thing with all of these chains is that you can walk away from them forever, and eat better, too!

They ALL need to see their profits slide, whether they backtrack or not. The simple idea that they intended to screw people tells you all you need to know...

Time to now boycott Taco

Time to now boycott Taco Bell!! Just the newest boycott that includes Walmart, Papa Johns, Chick fela, Wendys and all the other criminal Corporations doing these things to distroy the lives of employees in the name of greed!!

Yes! and ObamaCare is

Yes! and ObamaCare is destroying the finest healthcare system in the world in the name of greed! "Beware the greedy hand of government, thrusting itself into every corner and crevice of industry". -Thmas Paine. Medicare: BROKE, Medicaid:BROKE, Post Office: BROKE, Social Securuty:BROKE. Why would anyone ever believe the government can run healthcare?

Do you know why the post

Do you know why the post office is broke? The republicans have overburdened them by forcing them to pre fund retirement benefits. They are purposely trying to tank the USPS so that it can be privatized because the republicans think that is the panacea, fix everything route to the future. Without the republicans pulling their crap the USPS would be just fine.

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