Restaurant managers in Knoxville have begun telling servers that they will not be allowed to work more than 30 hours a week because, if they do, the restaurants will be required to provide health insurance under the Affordable Care Act, usually known as Obamacare.
At 30 hours a week, servers will be getting $65 a week from the restaurant ($2.15 per hour), and the opportunity to earn tips will be reduced by 25 percent. It is likely that many in the local restaurant industry will be working two jobs. Restaurant scheduling of servers will get a lot more complicated.
The restaurants are joining Knoxville-based Regal Cinemas, which notified employees last week that hours for most employees will be cut to no more than 30 because the company will have to provide health-care coverage for essential 40-hour-a-week employees; the company, which had $2.8 billion in revenue last year, says is cannot afford to provide health care for most of the rest of its employees.
The Applebee's and Olive Garden restaurant chains have also announced the 30-hour week for their restaurants.
As a double whammy for servers suffering pay cuts, the act also requires them to purchase health insurance. Since the restaurants are not offering a group policy, servers will have to pay the higher premiums for individual policies.
So far, Tennessee has not agreed to accept the expanded Medicaid (TennCare) program under the act, which would provide coverage for some of the newly part-time workers.