Earlier this year, Quincy, Massachusetts-based Stop & Shop found itself in a predicament.
More than 30,000 of the retailer’s employees were on strike, protesting a decision by the company to bump pay and bonuses, but also increasing health care premiums. Union reps said the increase in pay would be less than the extra cost for health insurance. Stop & shop executives disagreed, and negotiations stalled, sending nearly half of the company’s workforce onto the picket lines.
In April, a deal was reached, and a three-year contract was agreed up by the company and the United Food & Commercial Workers Union International. The deal kept employee health care and retirement benefits intact, provides wage increases instead of bonuses and keeps time-and-a-half pay for current employees who work on Sunday.
It was another example of the growing importance of employee wellness and health care, which has become a talking point I the lead-up to the 2020 election.
A number of retailers are either pulling back health care coverage or are negotiating it with hopes of managing one of their largest expenses.
Amazon-owned Whole Foods, based in Austin, Texas, is withdrawing medical benefits for its part-time workers beginning in January.
Employees previously need only to work at least 20 hours each week to buy into the healthcare plan. Now workers will need to work at least 30 hours. About 1,900 employees — less than 2% of the company’s overall workforce — will no longer be eligible for medical coverage.
“In order to better meet the needs of our business and create a more equitable and efficient scheduling model, we are moving to a single-tier part-time structure,” a company spokesperson said in a statement. “We are providing Team Members with resources to find alternative healthcare coverage options, or to explore full-time, healthcare-eligible positions starting at 30 hours per week. All Whole Foods Market Team Members continue to receive employment benefits including a 20% in-store discount.”
It’s a delicate balance that must take into account not only the bottom line, but also the general wellbeing of employees and how that can motivate workers.
Kroger recently reached a tentative deal with the United Food & Commercial Workers union. Labor costs have continued to be an issue for the company. Despite the fact that union membership rates are declining, the company has found itself in negotiations as more and more workers in the U.S. demand profits and more healthcare.
“Our financial results continue to be pressured by inefficient healthcare and pension costs, which some of our competitors do not face,” Gary Millerchip, Kroger’s CFO, said in the company’s second quarter call in September.
Lidl leads the way
German grocer Lidl — headquartered in the U.S. in Arlington, Virginia — may not have made as big of a retail splash as it had hoped when it entered the States in 2017, but the company is still making waves in the grocery world.
Starting in January, Lidl will offer medical benefits for all of 1,200 part-time U.S. employees.
“We want our team to have the peace of mind knowing they have healthcare coverage,” says Lidl US chairman Roman Heini. Giving team members working part-time at Lidl access to medical benefits is incredibly important and it will help them succeed. As we continue to expand, we are committed to supporting all our employees so they can be at their best.”
Lidl says it expects to invest up to $9 million in the first year of the initiative, with investment growing as the company expands. In addition to medical benefits, part-time employees working less than 30 hours per week currently receive dental and vision benefits. Lidl is run by the Schwarz Gruppe out of Germany, where there is universal health care.
The move was met with positive remarks from state leaders in Lidl’s U.S. footprint.
"Our goal at the Department of Community and Economic Development is to make Pennsylvania a place to work smart and live happy, and Lidl's commitment to its workforce will help do just that," says Pennsylvania Department of Community and Economic Development Secretary Dennis Davin. "We know that to fully support Pennsylvania workers, we must invest in more than just their education and training; we must also invest in their health and wellness, and we applaud Lidl for doing the right thing by providing healthcare benefits to all employees, no matter how many hours they work."
Hy-Vee recently implemented a similar plan, offering benefits to workers 19 and older who work at least 20 hours per week. Eligible employees can choose from among 11 options, including: health, dental, short-term disability, vision, group life, accident, critical illness, hospital indemnity, individual life and disability, auto, homeowners and renters, and pet insurance. The programs also cover spouses and dependents.
“Our people are the key to our success. We developed the new part-time employee benefits program with the goal of giving Hy-Vee a competitive advantage in the recruiting and retention efforts of our part-time employees. Benefits are an important component to the health and satisfaction of our employees,” says Sheila Laing, Hy-Vee’s chief administration officer and executive vice president. “This program is unique in our industry and differentiates us other retailers, while improving the lives of our employees.”