Sodexo policy changes suspended after outcry
Sodexo, Johnson State College’s food supplier, planned on cutting benefits for a number of employees on Jan. 1.
Sodexo said it was doing so in accordance with the federal Affordable Care Act, popularly nicknamed “Obamacare,” which requires that large employers offer health coverage to full-time employees.
After a loudly negative response from the public and confusion among employees, Sodexo announced on Oct. 29 that it is indefinitely suspending the planned policy changes.
This comes after Vermont State Colleges Chancellor Tim Donovan announced on the same day that the VSC administration would not approve Sodexo’s planned policy changes until their effects on Sodexo employees were clarified, due to uncertainty surrounding the effects of the proposed change.
The five-year contract Sodexo signed with the VSC last year said, “Sodexo shall not, without VSC’s prior approval, make any substantial changes in wages, fringe benefits or working conditions of nonmanagement Food Service employees.”
The Affordable Care Act’s definition of a “full-time” employee is one who works an average of 30-plus hours per week over a 52-week period.
Sodexo’s previous definition of a full-time employee was one who works an average of 30-plus hours per week for 6 or more weeks each quarter.
Under this new definition of full-time, many Sodexo employees would be left without health and welfare benefits for employees.
In an official press release issued in the form of “Frequently Asked Questions,” Sodexo said, “Employees who do not meet the definition for full time will no longer have access to Sodexo health and welfare benefits. However, they will have access to COBRA continuation coverage, as well as other options, including the state and federal health insurance marketplace (also known as exchanges), private insurance, and Medicaid, depending on personal circumstances.”
The document also noted that although the federal government hasn’t finalized regulations for the Affordable Care Act, “Sodexo has been working diligently to determine the best way to comply with its provisions… Ultimately, our decisions are focused on ensuring that we are compliant with federal guidelines while still being competitive in our industry.”
The Vermont Fair Food Campaign sees it differently. In their own document, the VFFC said, “Sodexo claims it’s being forced to cut people’s benefits because of ‘Obamacare,’ but this simply isn’t true. Nothing is stopping Sodexo from continuing to provide healthcare, retirement, sick days, or any other benefits, even if those employees no longer count as ‘full-time’ under the new healthcare law.
“Sodexo wants to make cutbacks to YOUR benefits for one reason: more profit.”
The VFFC document alleged that Sodexo was violating federal law by cutting workers’ hours to avoid paying health benefits.
“The Affordable Care Act may not require Sodexo to provide healthcare or other benefits to its employees,” the document said, “but it doesn’t prevent the company from providing benefits like it always has.
“Sodexo’s cutbacks aren’t about ‘Obamacare,’ it’s about CEOs and the people on the top making more money.”
The VFFC document pointed out that Sodexo is the second-largest food service company in the world, and that this year Sodexo is expected to make $12.3 billion in profits.
The document also stated that many Sodexo workers don’t make a livable wage, which is defined as $12.48 per hour, if one’s employer provides healthcare, even after years working for Sodexo.
In an interview with the Burlington Free Press, when asked why Sodexo won’t continue offering benefit eligibility for all employees who currently have it, Sodexo spokesperson Greg Yost said, “The ACA does not require that part time employees receive health care benefits, but does include an employer mandate to make health care coverage available to full time employees. We have a responsibility to all of our 125,000 employees and their families to ensure that we continue to operate a business that is viable and competitive in today’s economy and marketplace. Sodexo made this decision to ensure that we will be in compliance with the requirements of the Affordable Care Act while also maintaining our competitiveness in the market.”
There are 44 Sodexo workers at JSC, according to general manager Tom Fondakowski, who said about 60 percent of those workers are full-time.
Before the semester started, Sodexo’s regional vice president, Phillip Hardy, came to JSC to meet with employees and answer questions about the policy changes.
“We had a startup meeting on the 22nd of August where we went through a PowerPoint for the first wave of communications with employees, to explain to them how our company is transitioning and why we’re doing this,” Fondakowski said. “And then we’ve sent out three different letters with their paychecks that we’ve handed to them.”
If employees did have their status changed, Fondakowski said that they would still be able to find health insurance through the state and federal government.
“[If] they currently have insurance with us, and they’re reclassified as a part-time employee because of whatever is mandated, they’ll be transitioned to the state healthcare system for the new Obamacare act,” he said, “which means that they’ll be provided affordable healthcare.”
One concern about the policy changes is that full-time Sodexo employees that get reclassified as part-time might not have had the money to pay for federal insurance, and could have been fined at the end of the year for not having insurance.
“There’s a number of employees that are on state insurance now that are happy to be on state insurance, because in some aspects it’s more affordable for them than being on ours. And they’re wondering how [the ACA] is going to affect them… that’s the only concern I really hear about.”
Travis Beard works 40 hours per week as a supervisor for late night and the dining hall. While Beard was unhappy about how the changes Sodexo planned would affect his fellow workers, he was angrier with the government for initiating the changes with the ACA.
“It doesn’t matter if you’re a full-time employee or you’re not, because either way it’s something that we’re being forced into,” he said. “At the end of the year the government is going to start charging everybody.”
Because he has only been working at Sodexo for two and a half months, Beard’s own benefits have yet to kick in. When the ACA goes into effect, he would be penalized for not having health insurance.
“I’ve never ever in my entire life had health insurance,” he said. “I can’t afford it. It’s cheaper for me to not pay health insurance ‘cause I only go to the doctors maybe once, twice a year and its only $60. Versus Obamacare or whatever, which charges you like $100 a month and you’re paying $1,200 a year for something that I’m never going to use, unless it’s an emergency, hypothetically.”
Beard was also concerned for his fellow employees, because of the uncertainty surrounding who would be affected by the new policy.
Beard held out hope that Sodexo would work with its employees to find a solution that everyone could be satisfied with.
According to him, this sort of change in policy that hurts the workers is uncharacteristic from the company, which has amazed him with how it treats its workers and the incentives it offers.
“Sodexo’s huge on incentives—giving things to your employee to benefit them to stay with the company,” he said. “That’s really hard to find in a company. I’ve worked a shit-ton of jobs where they don’t care about their employees… They’ve got tons of people to help you out. If you need a lawyer for anything, they have lawyers on standby, you can call just to talk to somebody like a therapist. It’s just endless with the amount that they offer each person, like anybody that works here.”
Other incentives the company offers include bonuses for working during breaks and assistance in paying cell phone bills.
Chelsea Duncan is another employee who was worried about how she would be affected by the policy change.
She began her job working as a cashier in Stearns in early September.
When she applied for her job in August, she wasn’t told about any policy changes or informed that the full-time position she was after might become a part-time one, without benefits such as health insurance. One of the reasons she applied for the job was for the health insurance.
“I thought I was going to be getting full coverage, because that’s what I was told [in the interview],” she said. “And then when I came up here, another employee told me that they had recently made the changes, and that I wasn’t going to be getting the health coverage that I thought.”
Duncan did not know whether she would be reclassified as part-time, but the stress of the possibility couldn’t come at a worse time.
When she has to wrangle with the details of getting her own living situation set up, the combination of health problems and problems with health insurance are an unwelcome development.
Like Beard, her benefits have yet to kick in, and she recently dropped $600 on medical treatments. But she doesn’t think she can afford another such visit, even though the problems might not be solved.
“I’m having kidney problems and I just need to be able to afford to treat them and I need to be able to afford to stay working,” she said, “because if I’m not working on top of having the medical bills, I’m going to be even more in trouble.”
Duncan got an unhappy surprise when October break rolled around: she hadn’t known that she couldn’t work during that time. The fact that she is not allowed to work during school breaks just adds to her stress over her unstable financial position. This is the only job she has—if she isn’t working, she isn’t getting paid.
Duncan said that she doesn’t feel very well informed about what options she has from Sodexo right now.
“They’ve been sending me brochures and information about it, but none of it has really been helpful,” she said.
She believes that one of the worst parts of her situation is the possibility of working hours that are normally assumed to be full-time while having to tell people that she only holds a part-time job.
“Being able to tell someone, ‘Yes, I have a full-time job,’ and then telling someone, ‘Yes, I have a part-time job’, those are two totally different things—and yet I’m still working the same amount of hours as someone that would be considered full-time. And I feel like that’s probably the most disappointing part.”