Recipe for Havoc: Health Care Reform Poses Workforce Challenges for Restaurant Industry

Article excerpt

For restaurant servers like Reba York, health care reform promises to completely change her life.

"We will have to have two jobs, because you can't support yourself on 30 hours a week," said the longtime server at Zio's Italian Kitchen in Tulsa. "So that only leaves us with the option to get a second job."

While using a 30-hour yardstick to define full-time workers may rattle many industries, this element of health care reform could play particular havoc in the restaurant sector, where operators like Zio's employ shifts working different hours each night as needed, depending on demand.

"It would increase the amount of people we have to hire," said restaurant general manager Ty Ismailov, who also teaches hospitality accounting and leadership at Platt College. "It would increase the labor hours, the amount we have to spend on training."

It may also heighten volatility and turnover in a sector that has a workforce ranging from high school and college students to career professionals.

This challenge will not hit eateries as quickly as expected, following Washington's July decision to extend employer health care coverage deadlines to Jan. 1, 2015. But restaurant operators, like everyone else, still face the Oct. 1 deadline this year to explain insurance options to their employees, while their workers face a Jan. 1 deadline to have coverage in place or risk a $95 first-year penalty on their tax return.

With a lot of the nation's health care regulations still in development or debate, some restaurant operators are waiting to see how it all turns out.

"There's a lot of things happening behind the scenes with congressional leaders trying to get that 30-hour week changed to a 40-hour week," said Tony Henry, owner of Tulsa's two Full Moon Cafe locations and managing partner of the city's Wolfgang Puck Bistro. "I think a lot of us, ourselves included, are sitting back hoping that does change."

That could put more smaller operators, like Henry, below the 50 full-time staff member requirement for providing insurance coverage. Rhett Brooks, director of marketing and corporate communications for Simple Simon's Pizza, said many of its franchisees are already structured to avoid that level.

"If that number comes down, we're going to have to play a little catch-up," said Brooks.

Determining that number points to another concern: handing the time-period requirements proposed for determining just how many full- time workers a firm has. Those monitoring periods also may challenge the restaurant sector more than others, since eateries not only face frequent variable demand, but also employ a mix of students and career professionals who bring with them their own need for varying work hours and schedules.

"There's a very complicated formula about how you determine how many full-time employees you've got," said Jim Hopper, president and chief executive of the Oklahoma Restaurant Association. "We're going to spend this year really working with the National Restaurant Association to try to get Congress to make changes."

Many restaurant executives are using this extra year to study the situation and develop possible policies and practices. …