The Department of Labor has not validated labor complaints coming from Sodexo employees at the University of Vermont, but Sen. Phil Baruth, D-Chittenden, says he is looking for a legislative recourse.
Sodexo is changing the way it defines a full-time employee next year, it says, in response to the Affordable Care Act. Staff at UVM dining halls are worried they’ll be bumped down to part-time status, losing their benefits along the way. Baruth, who’s also an English professor at UVM, said he’s been flooded with complaints on campus, but workers are reluctant to speak publicly.
While UVM has been the hub of the alarm about Sodexo’s policy change, there are roughly 800 people employed by the company across the state.
Sodexo won’t know until October how many employees will be affected, according to company spokesperson Enrico Dinges.
The Department of Labor conducted a “preliminary review” of the situation and concluded — “Given the facts as we understand them, this change in scheduled work hours and subsequent pay reduction does not appear to violate either the law or a contract.”
Labor Commissioner Annie Noonan sent the memo to Baruth on Tuesday in response to the senator’s request for an investigation, made a week earlier.Baruth said the memo hasn’t given him total peace of mind, and he plans to pursue the issue in the Legislature. Even if Sodexo hasn’t done anything illegal, he’s worried other businesses will follow suit, and the trend will hurt workers.
“Sodexo is very good at this sort of thing, as any multinational is. They know by making this move they can save a great deal about of money,” Baruth said.
In fact, the California-based grocery chain, Trader Joe’s, recently took a similar step. It announced that with the advent of the Affordable Care Act, the company will terminate health care benefits for its part-time employees.
Dinges said Sodexo’s policy change was driven, in part, by a desire to avoid federal penalties. Under the ACA, large employers that don’t offer health insurance to their full-time employees by 2015 will have to pay a per-person penalty.
“Sodexo is aligning how we define benefits eligibility with federal requirements and definitions to avoid potential penalties that could be levied,” he said. “We made this decision to ensure that we will be in compliance with the requirements of the Affordable Care Act and to maintain our competitiveness in the market.”
But according to Robin Lunge, the state’s director of health care reform, employers like Sodexo that don’t provide coverage to their part-time Vermont employees will still have to pay an employer assessment fee to the state.
Sodexo’s part-time employees will be sent to the state-run exchange to obtain their health insurance plans.
But that won’t account for all their lost benefits, Baruth said.
“Let’s say these people are very lucky and they wind up with equivalent health care coverage. There’s still a number of remaining issue from wage differentials to retirement benefits to sick days,” Baruth said.
Dinges said Sodexo will compensate employees who are no longer eligible for paid vacation and sick leave with an “equivalent increase in pay.”
What does Baruth have in mind for a fix?
The senator, who is vice-chair of the Senate Economic Development Committee, alluded to a possible statutory change — “It seems as though there may be a place where statutes can be firmed up.” At the very least, he said he’ll ask the committee chair to hold several days of hearings on the subject, bringing in Sodexo management to testify “so that we can better understand the situation at Sodexo and other employers who may make similar cost-cutting moves.”
And there are other movements afoot, according to Baruth, to make sure Sodexo stays in line with fair labor practices. “There are a number of interested groups —union groups and advocacy groups — that are already talking about meeting about this to create a more sustained campaign to address several issues about Sodexo.”
The Department of Labor didn’t look into the validity of allegations — which Sodexo denies — that the company sought to discourage employees who went public with their complaints. In her memo, Noonan directs employees interested in filing a complaint to the National Labor Relations Board.
CORRECTION: We originally reported that the Vermont Department of Labor doesn’t have jurisdiction over interstate companies in Vermont; it does have jurisdiction in many areas of employment law, but not regarding protection for employees who want to go public with their complaints.