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Backlash? Florida Restaurants' Owner Retreats from 'Obamacare Surcharge'

November 14, 2012 - 6:00pm

A Floridarestaurateur has distanced himself from media reports that he will be implementing a 5 percent "Obamacare surcharge" at his 45 restaurants. He now insists no such plans are in the offing.

At least, not quite yet.

Several news outlets have reported that John Metz -- the franchisor of Hurricane Grill & Wings (five of which are corporately owned) and president and owner of RREMC Restaurants, which runs approximately 40 Denny's diners -- would be adding a 5 percent surcharge to each of his restaurants bills, as well as reducing his employees work hours, all in an effort to mitigate the expenses he will soon occur from the implementation of the Patient Protection and Affordable Care Act (Obamacare).

"If I leave the prices the same, but say on the menu that there is a 5 percent surcharge for Obamacare, customers have two choices. They can either pay it and tip 15 or 20 percent, or if they really feel so inclined, they can reduce the amount of tip they give to the server, who is the primary beneficiary of Obamacare," Metz told The Huffington Post Wednesday. "Although it may sound terrible that I'm doing this, it's the only alternative. I've got to pass the cost on to the consumer."

By Thursday afternoon, there were several calls over twitter and the blogosphere calling for a boycott of Metzs businesses. Leftist CNN political analyst Donna Brazile joined those calls, and Gawker named Metz Americas Meanest Business Owner (among other expletives that are unpublishable in a family-friendly newspaper).

But spokespersons for Metz told Sunshine State News Thursday that the restaurateurs comments were purely speculative, and later issued a public statement to that effect.

Under Obamacare, employers must provide healthcare coverage to their workers if they hire at least 50 full-time employees. The penalty for non-compliance is a fine of $2,000 a day per employee.

Metz will only consider imposing a surcharge if Obamacare is amended so as to require business owners to provide health coverage if they hire 50 full-time equivalent employees. For purposes of the law, a full-time employee is one who works 30 hours a week or more. A full-time equivalentwould be an employee who works a certain number of hours (including overtime) within a legally determined time period, even if he is not technically a full-time employee.

Metz's 45 restaurants will, however, be reducing several employees' schedules to 28 hours once the Act goes into effect in 2013, so as to keep below the 50 full-time-employee threshold.

"Despite recent media coverage, Hurricane Grill & Wings is committed to exploring viable and effective ways to deal with the changing economic climate, including the implementation of The Affordable Care Act, spokeswoman Shelby Fox wrote in a statement. We have always been, and will continue to be, 100 percent dedicated to our employees and customers and will work tirelessly to find solutions that are in their best interests.

Hurricane Grill & Wings supports President Obama and the revision of healthcare in this country, the statement continues. The 5 percent surcharge mentioned in various online outlets is pure speculation and only a potential option should the law be re-written to include full-time equivalents. The surcharge is not to be implemented or considered at this time."

Fox clarified in a follow-up email that [t]he surcharges are NOT being implemented at any restaurant locations; this includes Denny's.

It isnt clear how these statements can be reconciled with Metzs reported comment to the Huffington Post: We're trying to get more restaurant operators rallied around the concept of adding a 5 percent surcharge to their bill to cover the costs of Obamacare as opposed to raising prices.

Metz may well be responding to popular -- and possibly political -- backlash. Fox told the News he's no longer granting interviews on the matter, and not a single one of the dozen or so major Florida-based businesses contacted by Sunshine State News would comment on the impact Obamacare will have on its prices, hiring, or employee scheduling. Even spokespersons for the Florida Restaurant and Lodging Association would not offer comment, except to say that the Association is watching with concern what effects the interventionist legislation will have on affiliated businesses.

The National Restaurant Association did, however, release the following statement to FOX News:

We have warned for some time that the mechanics of the health care law are very difficult for the restaurant industry, which is a low-margin industry that works to keep costs down in order to provide value to customers.

All costs, from gas and commodities to labor and insurance, eventually impact the price on the menu. It is important that operators get very familiar with the provisions of the law and start planning for its implementation; however, its premature to make a specific assessment of exactly how the law will affect any individual business because there are so many details that are unknown.

Reach Eric Giunta ategiunta@sunshinestatenews.comor at (954) 235-9116.

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