Assembly shelves Walmart health care mandate — for now

June 28, 2013

By Katy Grimes

250px-New_Walmart_Logo.svgSACRAMENTO — For now, Walmart can keep its slogan, “Low prices. Every day. On everything.”

A bill aimed at forcing large non-union businesses to cover the health care costs of all employees, regardless of employees’ part-time status, died in the Assembly Thursday.

Called the “Walmart loophole” bill,  AB 880 was by Assemblyman Jimmy Gomez, D-Los Angeles. It  claimed Walmart and other large, “low-wage employers” are avoiding the new Obamacare health care law by keeping wages low, and workers’ hours to a minimum, so workers would instead qualify for Medi-Cal, the state’s subsidized health care system for the poor and those with low incomes.

The bill sought to make it illegal for a large employer with more than 500 employees to reduce worker hours below 30 a week, the threshold for avoiding Obamacare fines and penalties. The bill was sponsored by the California Labor Federation and the United Food and Commercial Workers.

After three roll call vote attempts to garner the 54 votes needed for a two-thirds supermajority to pass, the bill failed, 46-27.

The significance of this is three Democrats voted “no” on AB 880, and other Democrats did not vote at all on the bill, much to the chagrin of the author and the Democratic leadership.

Voting “no” on the bill were Democratic Assembly members Cheryl Brown of San Bernardino, Tom Daly of Anaheim and Adam Gray of Merced.

Not voting were Democratic Assembly members Raul Bocanegra of Pacoima, Steve Fox of Lancaster, Al Muratsuchi of Torrance, Henry Perea of Fresno, and Rudy Salas of Bakersfield.

Some of those not backing the bill, such as Daly, are in moderate districts and will face tough Republican competition in next year’s elections. They have to show some independence from the unions that dominate the Democratic Party to keep their offices. Ironically, only if they stay in power will Democrats keep their supermajority.

Gomez asked for and was granted reconsideration on AB 880, which will allow the bill to come before the Legislature again in August.

Walmart attack

AB 880 would require large employers to “pay their fair share when they dump workers onto Medi-Cal by cutting hours or wages in order to circumvent their responsibilities under the Affordable Care Act,” the official name of Obamacare, according to Gomez.

The real problem is that Walmart, a non-union company, provides jobs to people Democrats would prefer to see dependent on the unions and the government. But as I’ve pointed out before, even low-wage jobs pay the bills for millions of Americans. And many Americans who hold such jobs receive medical benefits already through spouses. Employees over 65 also already are part of Medicare, and will remain so.

“Do we allow the largest and most profitable companies to shirk their responsibility?” asked Gomez during the floor debate I attended.

“I want freedom … from  subsidizing the world’s richest corporations from gaming the system,” said  newly-elected Assemblywoman Lorena Gonzalez, D-San Diego, and a former office holder for the San Diego and Imperial Counties Labor Council, AFL-CIO. “It’s time we stand up for taxpayers against business.”

Of course, if the “Walmart loophole” bill eventually passes, it effectively will be a tax on Walmart forcing up prices paid by shoppers.

“Here it is, we’re already talking about closing loopholes,” challenged Assemblyman Tim Donnelly, R-Twin Peaks, noting that most of America doesn’t yet even know what Obamacare requires because it’s only now being implemented. “We’re already talking about employers as if they are doing something wrong.”

“It’s not someone else’s responsibility to pay for your health care,” Donnelly said. “Health insurance is an individual responsibility. We ought to let the free market control our health care. We’re bringing the force of government to bear on companies that have done nothing wrong. These bills are costing people jobs.”

The bill, classified as a “job-killer” by the California Chamber of Commerce, would also penalize employers whose wages are too low to keep employees off of Medi-Cal, effectively a back door increase in the minimum wage.

Opponents to AB 880 say the penalty was written purposely vague with the intent of being very painful to private-sector business.

 

13 comments

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  1. Rex the Wonder Dog!
    Rex the Wonder Dog! 28 June, 2013, 15:27

    Trader Joe’s used to do this with their business plan 25 years ago when I worked their during college, we had 30 employees, 24 part time to avoid the healthcare costs.

    Reply this comment
  2. Sean Morham
    Sean Morham 28 June, 2013, 15:30

    Lorena Gonzalez sounds like a piece of work. She is hereby nominated for this stupidest legislator award this week. Dumber than a stone, corrupt as anyone associated with Tammany Hall.

    Reply this comment
  3. Steve Mehlman
    Steve Mehlman 28 June, 2013, 16:10

    Simple question: Since WalMart and COSTCO both have to pay the same taxes, buy the same workers comp and liability insurance, and deal with the same regulations, why does COSTCO treat its employees so much better?

    And why should my tax dollars have to be used to make up the difference?

    P.S. Memo to Katy: You allow posts like Sean Morham’s gratuitous insults on this site, but you accuse me of being “obnoxious”? LOL.

    Reply this comment
  4. us citizen
    us citizen 28 June, 2013, 18:25

    Costco and Walmart have different business plans. The private sector can not dictate what either company can or can not do or how they run things. If you dont like them and you work there, then quit. As far as your money going to pay for the difference, what do you think is going to happen when BO care goes into full affect. You are paying for this now with increased premiums with private healthcare and you will be paying even more in the near future.

    Reply this comment
  5. Rex the Wonder Dog!
    Rex the Wonder Dog! 28 June, 2013, 22:15

    Steve has a good point….I myself have always wondered why a good company cannot provide some sort of healthcare as it can be “bare bones” coverage and is 100% tax deductible. I also agree with US Cit, people can quit and work elsewhere….tough question and there is no clear answer IMO.

    Reply this comment
  6. cyndikus
    cyndikus 28 June, 2013, 23:22

    But never miss the point that when Walmart buys Healthcare for their employees, those who shop there will pay for it by the increase in prices. Same for your local burger stand. Will you pay $22 for the hamburger so everyone will have health care coverage or will you cook the burger at home and watch another tax payer go bankrupt? At least he will healthcare when he is unemployed.

    Reply this comment
  7. Ulyesses Uhaul
    Ulyesses Uhaul 29 June, 2013, 08:28

    Healthcare finishes the Denmark Model….free health care, education, food stamps, housing, cell phone, free legal, welfare card……

    Upward mobility thing of the past….a dependency class and never ending immigration to provide slave labor for your beloved masters.

    Every time your in Poodle’s truck stop….the workers collectively make far more than you…..public and private.

    Reply this comment
  8. Rex the Wonder Dog!
    Rex the Wonder Dog! 29 June, 2013, 08:40

    But never miss the point that when Walmart buys Healthcare for their employees, those who shop there will pay for it by the increase in prices. Same for your local burger stand. Will you pay $22 for the hamburger so everyone will have health care coverage or will you cook the burger at home and watch another tax payer go bankrupt?
    ==
    The problem with this argument is that Walmart (and also McDonalds) are both making RECORD profits, mire than before the Great Recession started………. So I question your assumption it would lead to higher costs, it may just lead to SLIGHTLY less profits.

    Reply this comment
  9. Steve Mehlman
    Steve Mehlman 29 June, 2013, 12:23

    Obviously, there are many companies that sell hamburgers at reasonable prices and provide their workers with health coverage. Are you really that greedy that you will begrudge paying a few cents more for your burger so that your fellow American can get help if he or she is sick?

    And don’t miss the point that what you are “saving” by shopping at WalMart you are losing by having to pay taxes to cover their health care.

    Reply this comment
  10. Queeg
    Queeg 30 June, 2013, 08:29

    Stevo….you must have got your Masters at Bagdad Bob’s university…

    Your pushing the line…toward thinking all CWD are village idiots…..

    Reply this comment
  11. CalWatchdog
    CalWatchdog Author 1 July, 2013, 09:41

    … and we just can’t have businesses making “record profits,” can we. That’s just wrong. Because when a business has “record profits,” they are able to reinvest, expand, add more stores, hire more employees.

    Nope. We’ve gotta kill those “record profits.”

    Katy

    Reply this comment
  12. Rex the Wonder Dog!
    Rex the Wonder Dog! 2 July, 2013, 00:18

    Katy, if the company is making record profits then they should offer healthcare.

    Reply this comment
  13. CalWatchdog
    CalWatchdog Author 2 July, 2013, 12:23

    No Rex, Walmart does not need to offer healthcare to its part time employees; the free market decides that. Full time Walmart employees already receive health care benefits and a retirement plan.

    From Walmart’s website – notice Walmart is right in the mix on benefits:

    “Health benefits
    Walmart offers a variety of health and wellness benefits to eligible employees. The largest portion of Walmart job benefits exist in the form of health insurance plans. Walmart associates can choose from a wide array of medical coverage, including health reimbursement accounts and health savings accounts. These health benefits feature no lifetime maximums, dependent coverage up to age 25, and a $4 co-pay on more than 2,000 generic prescription drugs.

    Walmart health and wellness benefits, apart from traditional health insurance, include dental insurance, company paid life insurance, accidental death and dismemberment insurance, and business travel accident insurance. Walmart workers also receive sick time, short-term and long-term disability insurance, and dependent life insurance. Walmart even covers employees needing corrective lenses with an in-store associate eyewear program.

    401(k) plans
    In addition to health and wellness benefits, Walmart workers may qualify for a variety of financial perks. Walmart financial employment benefits include matching up to 6% of employee 401(k) contributions, stock purchasing plans, a 10% discount on many store items, discounted travel options, and military differential pay. Walmart associates also receive paid time off, including bereavement, holiday, jury duty, personal, and vacation days.

    Walmart needs to hire new workers all the time, and employee benefits packages help entice both entry-level employees seeking part-time vacancies and professional associates in need of a retail career. To receive competitive pay and Walmart benefits packages, complete an online Walmart job application form today. Apply online to discover employment opportunities Walmart is hiring workers with your qualifications for today.

    Employee Benefits Comparison
    How do Walmart benefits compare with similar companies?

    Health Insurance Dental Vision Paid Vacation 401K Life Insurance
    Kmart X X X X X X
    Sears X X X X X X
    Target X X X X X X
    Walmart X X X X X X
    Most companies reserve comprehensive benefits packages for full-time employees. Part-time workers often receive more limited job benefits. Apply online to learn about available employee benefits with Walmart.”

    Katy

    Reply this comment

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