Tag Archives: workers

Federal Contractors: Money First, Workers Last

moneyLittle Rock       It seems straightforward.   If you are going to ask for and, if fortunate, receive government money, then you are going to have to follow the law.  Some Senators though had their staff undertake a study of federal contractors only to find that many of these big business were delighted to get the dollars, but somehow believed that they only had to follow whatever laws they felt like, especially when it came to their workers’ wages and health and safety:

“The report found that 32 federal contractors were among the leading companies in the amount of back pay assessed for wage violations between 2007 and 2012.  ‘Overall, the 49 federal contractors responsible for large violations of federal labor laws were cited for 1776 separate violations of these laws and paid $196 million in penalties and assessments.  In fiscal year 2012, these same companies were awarded $81 billion in taxpayer dollars.”

You know, that’s just plain wrong, but equally appalling is the obvious conclusion that when the federal government is giving out these contracts it really doesn’t care whether or not the laws are being followed, especially when it comes to the tens of thousands of workers involved.  I would almost bet money that this is the tip of the iceberg when it comes to real violations, especially on wage issues, since the work of really monitoring whether or not something like the Service Contract Act was being followed to the nickel on assuring that workers were receiving proper amounts under area wage determinations would have been exhausting and difficult.  

The whole point of prevailing wage statutes like SCA or Davis-Bacon or the McCarran shipbuilding act is to make sure that the federal government sets the standard as a fair and safe employer.  An Obama administration plan to give preference to bidders that provided what they determined to be “good wages and benefits” was shelved, according to Times’ labor reporter, Steven Greenhouse, so perhaps this is another pipe dream, but it shouldn’t be, should it?  Frankly, I think they should establish themselves and their contractors as “model” employers and provide the benchmarks in these areas, but even if not that, the least we should expect is fairness and attention to the letter, if not the spirit, of laws that are meant to protect worker-citizens.  

Bad actors like Tyson Food, Imperial Sugar, and British Petroleum are legendary in these reports, yet it seems the feds don’t even keep a database up to date on compliance and infractions.  Maybe we need to ask the NSA with its vast computing and database capacity to take this on to keep them out of mischief and provide real worker protections as part of the package on the $307 billion in federal contracts awarded.

In the meantime it’s all about the money for these folks while the workers take the risks and we all get the hindmost.


ACA May Offer a Bargaining Opportunity for Lower Wage Workers

employee-health-insuranceNew Orleans  I’m just thinking out loud, so I might be stumbling over myself, but in continuing my study of the likely inner workings of the Affordable Care Act, there almost seems to be some bargaining opportunities with employers of lower wage workers to leverage full subsidies of individual health insurance for workers who otherwise might find coverage unaffordable.    These are not perfect coverage options, but compared to leaving workers with no coverage, they are near miraculous, especially if we could jiggle the cost over to the boss.

            There are several currents at work here that might intersect.

One is that some insurance companies and large scale service-worker employers are looking at low cost, minimum benefit programs in order to comply with the letter of the reform, if not the spirit of more robust healthcare protection.   Despite the fact that the Obama Administration delayed the penalties for mandatory coverage for large employers including until 2015, there’s no question, ignoring the Republican mischief, that it’s coming, and in recognition of that, many companies in the food service and health care industry for example, will go for the cheap.

Similarly, from the workers’ perspective, lower incomes will lead many workers to chose the cheapest of the four Qualified Health Plan (QHP) and go with the Bronze alternative that provides the basic mandatory health package for all plans, but only reimburses 60% of the costs through the insurance, compared to the top Platinum plan that will handle 90% of the weight.  Keep in mind as well, that employers will likely have approved plans even if they are only paying 50% of the cost and shoving the rest to their workers, pushing many workers into exemptions from the coverage based on lower incomes.  Early state based surveys indicate that once workers qualify for premium tax credits and cost sharing, the real cost for many lower wage workers might be between $100 and $150 per month.  

At that level a worker would end up paying something that will eventually approach the level that the boss will pay as a fine for NOT providing coverage, and by paying low wages with a high shared premium, pushing their workers onto the government dime. Though it’s certainly not the intention or hope of the Act, if the employer could be leveraged to pay the worker’s share of the exchange coverage in lieu of the fine or as equivalence to what their share of their own plan cost would have been, then we could virtually guarantee total coverage for many lower waged workers.

Would this undercut the intention of the Act?  Possibly, but at the level many service workers are paid, they will be exempted from having to have any coverage, so the worker will not be paying a fine at the end of the year, and given that almost half of the states are not expanding Medicaid coverage, these workers will simply fall in the gap with no coverage.   At the same time the intention of the Act cannot be that employers can escape their mandatory obligations, simply by paying low wages.

Tomorrow we’re bargaining with a large national health care employer where we represent about 400 workers.  They offer health insurance, but under their current policy, if a worker signed up for the coverage it would take 20% of their gross wages to pay their share.   Under ACA anything more than 8 or 9% of gross income allows workers to access the state or federal health care exchanges, putting workers in the Hobson’s choice I described earlier where they either then have to pay out of their own pockets, and given the wages many experience, they are still going to be exempted and will probably go naked without coverage.  At the same time many of these are younger, healthier workers and exactly what is needed in a larger risk pool for the good of the overall program.

If we had a way to bargain the potential employer fine or payment share in their own minimum plan over to the cost coming due to the individual worker forced by default to the exchange, then we would be able to get many more workers covered in this and similar situations.   For us it’s worth bringing to the table now.   For others it might be worth putting high on the list of possible amendments as we try to get a better plan for millions of lower wage workers.