BUSINESS
04/17/2013 10:44 am ET | Updated Apr 22, 2013

Regal Entertainment Group Cuts Employee Hours, Explicitly Blames Obamacare In Memo: Report

AP

The country's largest movie theater chain may be the first public company to issue a company-wide policy limiting employee hours because of Obamacare.

Fox News reports that Regal Entertainment Group last month cut some workers' hours down to 30 per week in an effort to bypass requirements under the Affordable Care Act. The law, passed in 2010, requires employers to provide health benefits to full-time employees defined as those averaging at least 30 hours a week.

Workers who do not average 30 hours per week are considered "variable-hour employees" under Obamacare, and they are not legally entitled to health benefits from their employer, said Gary Claxton, vice president of the Henry J. Kaiser Family Foundation, a non-partisan organization that provides facts and analysis on health care issues. Claxton said Regal is "speaking loosely" in its memo regarding capping workers at 30 hours per week, and that the movie chain is probably changing its hourly worker policy to ensure that some of its employees do not achieve full-time employee status under the law.

In the memo, Regal tells managers to explain the change to workers by telling them that the Affordable Care Act forced the company to raise its health budget, according to Fox. You can read more from the company memo over at Fox News, which first reported the story. Fox notes that Regal workers are outraged by the change, and some have already left the company.

Regal did not respond to multiple requests for comment by The Huffington Post.

Franchise owners at various fast-food chains have previously threatened to limit the number of total hours some employees can work or raise prices as a result of Obamacare. And Darden Restaurants, the parent company of Applebee's and Red Lobster, late last year tested using more part-time workers in attempt to curb its health care costs. Regal seems to be the first public company to institute such a policy, however.

With its decision, the movie chain -- which last year saw box office sales rise 6.5 percent as it pulled in $1.72 billion in gross profit -- finds itself in the corporate minority, according to a recent survey. Close to 90 percent of employers do not have plans to reduce hours worked by employees as a result of Obamacare, the survey found.

Regal employs more than 22,000 people nationwide as of 2012, with the average floor staff worker earning $7.90 an hour, and the average cashier earning $7.80, according to Glassdoor, a pay-scale website.

CORRECTION: A previous version of this post said Regal Entertainment Group posted a $1.72 million profit in 2012. It posted a $1.72 billion profit. It also previously said Regal Entertainment Group has more than 5,000 employees. It has more than 22,000.

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