Minimum wage hike, health care increase, added costs lead to restaurant closing

Shortly after voters in Nebraska said yes to an increase in the minimum wage a Burger King in Hastings announced it would be closing.

There were news headlines that the closing was due to the wage hike. Dennis Erickson, president and CEO of Horizon Holding Inc. that owns the location, says that isn’t entirely true.

“In my opinion anyway the headline was really a distortion of the announcement,” according to Erickson. “This was a business decision based on a lot of factors. It wasn’t only the minimum wage increase. It was also the mandated health care and other rising costs we’ve seen over the years.”

Erickson says the Affordable Health Care Act will have a huge impact on not only their operations but many others across the country. He says right now they offer health insurance to managers and shift coordinators at the cost of about $400,000 a year. If everyone working more than 30 hours a week signs up for health care that cost will hit $1.5-million.

Regarding the minimum wage issue, Erickson says only 6% of their employees now earn the current $7.25 minimum wage and all of them are new hires. He says more than 50% of their employees now make more than $8 an hour.

All the employees now at the location that is closing will be moved to another restaurant in Hastings.