NEW YORK (AP) — The owner of Olive Garden and Red Lobster restaurants is putting more workers on part-time status in a test aimed at limiting the impact of looming health coverage requirements.
Darden Restaurants Inc. declined to give details but said the test is only in restaurants in four markets across the country. The test entails increasing the number of workers on part-time status, meaning they work less than 30 hours a week. Under the Patient Protection and Affordable Care Act of 2010 (PPACA), companies will be required to provide health care to full-time employees by 2014. That would significantly boost labor costs for businesses.
About 75 percent of Darden’s employees are currently part-timers.
Bob McAdam, who heads government affairs and community relations for Darden, said the company is still learning from the tests, which was first reported by the Orlando Sentinel.
“We’re not at a point where we have results,” he said. McAdam also noted that Darden is not alone in looking at ways to keep labor costs in check, with companies industry wide prepping for the new regulations to take effect.
Darden, based in Orlando, Fla., has made cost cutting a priority in recent years as sales growth and traffic have stalled at its flagship chains. In the most recent fiscal quarter, the company’s restaurant labor costs were 31 percent of sales. That’s down from 33 percent three years ago.