Business & Economy

Labor Dept. finds no fault with Sodexo employee classification changes

Bill Barbour, who works in utilities for Sodexo at UVM’s Cook Commons Dining Hall, washes dishes during his morning shift. Photo by John Herrick/VTDigger
Bill Barbour, who works in utilities for Sodexo at UVM’s Cook Commons Dining Hall, washes dishes during his morning shift. Photo by John Herrick/VTDigger

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.

Sen. Philip Baruth, D-Chittenden
Sen. Philip Baruth, D-Chittenden
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.

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Alicia Freese

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  • Lester French

    Yes, this is just the tip of the ice burg. Employees who can be cut back to part time will be hurt because of the health care changes that are being forced on us. These are the blue collar workers being hurt, not the people sucking off the welfare teat, nor the bureaucrats who are living off what they can take away from the taxpayers.

    • Cheryl Pariseau

      Lester: That is the problem they (elected officials) want more people sucking off the welfare teat because that is an easy way to secure votes.

  • J. Scott Cameron

    It is reassuring to know that Sen. Baruth, who never created a job in his life, is going to fix things. No doubt with the help of a lot of other people who never created a job in their lives either.

  • Dave Bellini

    There’s still a number of remaining issue from wage differentials to retirement benefits to sick days,” Baruth said.”

    Would someone from the legislature please insist that all correctional officers also get sick days, health insurance and retirement also? No one from the Executive branch of government is interested.

    “Temporary” correctional officers work 40+ hours a week, take the same risks as “permanent” CO’s, have to contend with violent, assaultive criminals and have to ensure that inmates receive medical and mental health. Temp CO’s of course, get none of this.

    Is there anyone in the legislature that can explain why it’s cost effective to hire and send to academy training over 250 people to fill 65 temp slots in one year?

    Temp CO’s have to endure months or even years as a temp with out any benefits. The turnover is outrageous. The state has tried to hide this for years.


    • Fred Woogmaster

      Mr. Cameron: Is Mr. Salzman’s comment valid?
      Do you know not of what you spoke?

      I would think that as an author of
      several published books Senator Baruth
      has in fact contributed
      to the creation of jobs.

      Fred Woogmaster

    • Fred Woogmaster

      Corrections Oversight Committee?

    • Fred Woogmaster

      Mr. Bellini:

      How recently has the
      Corrections Oversight Committe
      considered this issue(s)?

      Fred Woogmaster

      • Dave Bellini

        To the best of my knowledge they have not addressed this issue nor have they identified this as a major problem. It’s my opinion their primary focus is the welfare of inmates, the DOC budget and a few policy issues.

        The fact that we are bleeding staff, spending millions on overtime and millions more on training people who quit almost immediately is not on anyone’s radar screen.

        Some prisons have a high percentage of new staff.

        Some states run new correctional officer training academies every few years. Vermont DOC runs training academies almost non-stop, year round.

        Recruitment and retention of new staff is a joke.

        We don’t perform pre-hire background investigations.

        Few people already employed can afford to work for the DOC because the DOC hires 99% of correctional officers as temps.

        Correctional officer is an extremely stressful job. Instead of giving these new employees EXTRA support, the state hires them as temp workers with NO support.

        Temps get no sick days, no matter how long they work for the state, so when they do get sick they have to go to work or lose pay.

        Temps are ineligible for mental health counseling available to other state employees.

        Temps are ineligible for E.A.P.

        Temps get no dental.

        Temps are ineligible to join the state employee health plan. And we have the health care governor!

        Temps cannot join the retirement plan.

        Temps are excluded from the deferred compensation plan.

        Temps are ineligible for a flexible spending card for health needs.

        Temps can be fired for any reason or no reason.

        Temporary correctional officers face the same conditions as permanent staff. They get spit at, get feces thrown at them and get assaulted the same as classified permanent CO’s. They take the same risks and do the same job.

        Temp CO’s are treated like 2nd class citizens by the state of Vermont. They can’t complain, since they can be fired for any or no reason.

        So, we’ll just keep marching armies of Vermonters through our prisons to make sure inmates get things like health care and dental while denying it to correctional officers.

        • Pat McGarry

          “Dental care” afforded inmates is limited to pulling teeth.

  • Al Salzman

    J. Scott Cameron unsubstantiated declarations about senator Baruth never having created a job in his life, and others he does not name, who “no doubt” “never created a job in their lives either,” show the unwavering certitude of the blind man who in encountering an elephant for the first time, and feeling only the trunk, declares emphatically that it is very much like a snake.

  • Jeffrey Kaufman

    This article indicates to me that the problem is not Sodexo and the multitude of other companies moving to protect themselves, but the Affordable Care Act.

    Perhaps Senator Baruth is directing his energy in the wrong direction.

    • Jim Fellerman

      I disagree with your comment. Sodexo has everything to do with this. Granted, the loss of insurance is due to the ACA.
      Sodexo employees were classified full time if they averaged 30 hours per week, including those working at colleges where most employees work only eight months. Now the company is using the Affordable Care Act as an excuse to say that these same employees are now part time Instead of using an average of 30 hours per week over the eight months we are open, they are basing it on the entire 12 months. Therefore, only management can receive benefits at my unit. So we can no longer receive any benefits, including sick and vacation pay, life insurance and holiday pay.
      If all of the Sodexo campus units do this, just think of the savings for the company.

  • debra hansen

    I agree with you Jim. I am a sodexo emploee at a high school and the people who got cut were not management. Some of us have worked for this company for 20 years or more. I was hired originally with no insurance or vacation pay. I have worked hard and earned a position to receive those benefits. Ethically I don’t think I can work for this company much longer.