Fan-987-Logo_35 35h_CBSSportsRad_Tampa CW44_TB

Latest News

Health Changes Spur Test Of More Part-Time Workers

View Comments
Screen grab of an Olive Garden restaurant location. (Credit: olivegarden.com)

Screen grab of an Olive Garden restaurant location. (Credit: olivegarden.com)

ORLANDO (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 new health care act, 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.

The reduction was driven by several factors. Given the challenging job market, Darden has been able to offer lower pay rates to new hires. Bonuses for general managers have been reduced as sales have stagnated. Servers at Red Lobster are handling four tables at a time, instead of three.

And last year, the company also put workers on a “tip sharing” program, meaning waiters and waitresses share their tips with other employees such as busboys and bartenders. That allows Darden to pay more workers a far lower “tip credit wage” of $2.13, rather than the federal minimum wage of $7.25 an hour.

Darden isn’t the only restaurant chain looking at managing labor costs.

This summer, McDonald’s Corp. Chief Financial Officer Peter Bensen noted in a conference call with investors that the fast food company was looking at the many factors that will impact health care costs, including the number of full-time employees.

Darden operates more than 2,000 restaurants in the U.S. and Canada, including its LongHorn Steakhouse. It employs about 180,000 people.

(© Copyright 2012 The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten or redistributed.)

View Comments
  • http://mediamrs.com/main/2012/11/papa-johns-can-give-away-2-million-free-pizzas-but-cant-afford-healthcare-for-its-employees-and-theyre-blaming-obama/ Papa John’s Can Give Away 2 Million Free Pizzas But Can’t Afford Healthcare For It’s Employees?? And They’re Blaming Obama? | Media MRS.

    [...] to CBS Tampa Bay: Darden Restaurants Inc. (the parent company of popular casual dining establishments such as Olive [...]

blog comments powered by Disqus
Listen Live!

Follow CBS Tampa

Like us on foursquare

Connect With 98.7 The Fan

kirk and dinger 300x75 Connect With 98.7 The FanThe Kirk & Dinger Show – 6a – 9a the commish 300x75 Connect With 98.7 The FanThe Commish – 9a – noon booger and rich 300x75 Connect With 98.7 The FanBooger & Rich – 3p – 7p sports babe 300x75 Connect With 98.7 The FanThe Fabulous Sports Babe – 7p – 10p

Call Toll-free (888) 998-7987

Text 98.7 The Fan

Max 4 msgs/wk. Msg & data rates may apply. Text STOP to 98190 to cancel.

98.7 The Fan Team Coverage

rays 98.7 The Fan Team Coverage bucs 98.7 The Fan Team Coverage
tb lightning logo 98.7 The Fan Team Coverage usf 98.7 The Fan Team Coverage

CBS Radio Tampa

1 CBS Radio Tampa Bay 2 edit2 CBS Radio Tampa Bay 3 CBS Radio Tampa Bay
5r CBS Radio Tampa Bay 5 CBS Radio Tampa Bay 6 CBS Radio Tampa Bay
7 CBS Radio Tampa Bay 8 CBS Radio Tampa Bay 9 CBS Radio Tampa Bay

Select a Live Stream