Starbucks CEO Won’t Use Obamacare As An Excuse To Cut Workers’ Benefits

Starbucks CEO Won’t Use Obamacare As An Excuse To Cut Workers’ Benefits

BY TARA CULP-RESSLER ON AUGUST 27, 2013 AT 8:42 AM

Starbucks CEO Howard Schultz

CREDIT: Reuters

Starbucks Coffee Co. has no plans to slash workers’ hours or cut employee benefits in response to Obamacare, the company’s CEO confirmed to Reuters on Monday. Although several other large companies in the food service sector have indicated that they’ll need to shift costs onto their workers in anticipation of upcoming changes under the health law, Starbucks CEO Howard Schultz said he won’t follow suit.

“Other companies have announced that they won’t provide coverage for spouses; others are lobbying for the cut-off to be at 40 hours. But Starbucks will continue maintaining benefits for partners and won’t use the new law as excuse to cut benefits or lower benefits for its workers,” Schultz told Reuters in a telephone interview.

Obamacare requires employers with 50 or more workers to provide adequate health benefits to anyone who works at least 30 hours a week. If those large companies don’t offer some form of health coverage, and if their employees end up needing to rely on federal subsidies to get insurance in Obamacare’s marketplaces, they’ll have to pay a fine. That employer responsibility mandate has led some CEOs to decry the health reform law — saying they can’t afford to offer their workers decent health coverage, and will need to either slash workers’ hours below the 30-hour threshold or let some employees go.

Despite the doomsday predictions about Obamacare’s drain on the business sector, however, studies have found that very few employers are actually cutting workers’ hours specifically because of the health reform law. In reality, employers have been slashing benefits and attempting to shift costs onto their low-wage workers for years. As Schultz notes, Obamacare is simply providing a convenient scapegoat.

Starbucks already provides health care to part-time employees who work at least 20 hours a week, which goes well beyond Obamacare’s coverage requirement. Schultz confirms that the company spends more on health care than it does on coffee, but he has always refused to cut his workers’ benefits.

This isn’t the first time that the head of the coffee shop chain has taken a stand on a politicized issue. Schultz has been vocal about his company’s support for marriage equality, and has suggested that opponents of same-sex marriage can simply sell their Starbucks stock. He has also publicly come out in support of raising the minimum wage.