Royal Farms Slashes Employee Hours: Report

Published in CSP Daily News

Retailer said to be skirting Obamacare mandates

BALTIMORE -- The Royal Farms convenience store chain has in recent weeks aggressively cut employee hours to avoid having to provide medical insurance under the national health care reform known as Obamacare, according to a report in the Huffington Post.

Royal Farms, a Baltimore-based chain of 140 stores, recently reduced most of its full-time and part-time workforce to less than 30 hours a week rather than provide health insurance as will soon be required under Obamacare, according to workers in Maryland, Delaware, Virginia and Pennsylvania, states the report.

CSP Daily News calls to Royal Farms executives to respond were not returned by press time.

At staff meetings held last month, managers informed workers that the company was transitioning to an almost entirely part-time workforce, three workers in Maryland, who spoke on the condition that they not be named, told the online newspaper. According to these workers, the managers specifically said the company was reducing its number of full-time workers in reaction to Obamacare, which requires that larger firms provide health care to all employees working more than 30 hours a week or pay penalties.

“Since the meeting, they’ve slowly reduced everyone in my store down to 27 hours a week or below,” said one cashier from Baltimore who has worked at Royal Farms for about a year. Royal Farms did not respond Huffington Post's multiple requests for comment.

Traditionally, convenience stores offering benefits have very minimal packages, with workers shouldering most of the cost through high premiums and deductibles. But under Obamacare, companies will be required to offer plans that meet new standards for what services they cover and how affordable they are for employees. In many cases, these plans will offer more comprehensive coverage than currently available to workers and thus will come at a higher price to employers. Many business associations, including NACS, have bristled at the added costs such rules will bring to their members.

Obamacare will also require most people to buy some form of health insurance or else pay penalties, a rule that will prompt more people to take advantage of employers’ plans. Currently, few workers in the convenience store industry take advantage of benefits, NACS spokesman Jeff Lenard told the newspaper, due to the fact that the workforce is largely seasonal.

Royal Farms’ new policy applies to everyone except for certain managers and those already enrolled in company benefits, workers said.