Real Canadian Superstores: The UFCW's Low Wage Wasteland
Part 2: The Benefits of Hypocrisy
In the Wages of Hypocrisy we commented on how, for many UFCW-represented part-timers at Loblaws Real Canadian Superstores, the pay really stinks. In this installment we look at the benefits of hypocrisy - the health and medical benefits that the UFCW leaders bargained for these workers. They stink too - the benefits and the UFCW leaders who bargained them.
It's not that there aren't any benefits in the RCSS deal. The deal provides a prescription drug benefit, a vision care benefit, a dental expense benefit, a weekly indemnity (sick pay) benefit and a long term disability plan. That's the good news. The bad news is that it's doubtful that many of the part-time workers who will make up most of the RCSS workforce will ever be able to access those benefits because of the numerous strings attached.
The benefits provided for the RCSS part-timers considerably less than those that part-time workers at Loblaws conventional stores receive under the non-gutted version of the collective agreement. The prescription drug benefit, for instance, only covers 50% of the cost of prescriptions and is capped at $750 per year (part-timers at Loblaws conventional stores receive 100% coverage with no annual maximums). "Lifestyle drugs" like oral contraceptives and smoking cessation products are excluded (unplanned pregnancies and lung cancer being "lifestyle choices" presumably). But that's not the half of it.
Great Benefits? No! Strings Attached
- To qualify for prescription drug coverage, workers must be employed for 5 years AND have worked 600 hours in the previous calendar year AND "must be actively at work for insurance to take effect".
- To qualify for vision care coverage, workers must be employed for 3 years AND have worked 600 hours in the previous calendar year AND "must be actively at work for insurance to take effect".
- To qualify for dental coverage, workers must be employed for 3 years AND have worked 800 hours in the previous calendar year AND "must be actively at work for insurance to take effect".
Many part-timers, even those who last 3 years, will never make the hours required to qualify for these benefits. A part-timer who is consistently scheduled 24 hours per week will wrack up 1248 hours in a year - more than enough to qualify - assuming that he or she works every scheduled shift. But a part-timer scheduled 16 hours per week will only work 832 hours in a year - again, assuming that he or she works every scheduled shift. A part-timer who works 12 hours per week will only total 624 hours in a year. Taking time off because of illness, maternity leave, dependent care or because of scheduling conflicts with other part-time jobs (which are a part of life for underemployed part-time workers) can easily reduce these workers' hours to below the thresholds to entitlement to benefits. But even if they make it over 600 or 800 hours, they still must be "actively at work" to qualify.
What does "actively at work" mean?
"An employee is considered actively at work if he/she is not disabled and he/she is either at work or absent for vacation weekends, statutory holidays or shift differentials."
That means that if you're off work for any other reason (like illness, injury, maternity leave, bereavement, layoff, looking after sick children or elderly relatives, attending to a family emergency, you name it) your benefits won't take effect - regardless of how many years of service you have or how many hours of work you've put in.
Not only do part-timers at the RCSS's have to be employed for a very long time (3 to 5 years in a part-time job ghetto is a very long time) but they must have worked a minimum of 600 to 800 hours in the previous year. Depending on how they are scheduled or whether other events in their lives have caused them to be away from work, they may work for years without qualifying or lose their benefits for long periods through no fault of their own. The significant flexibility that the RCSS deal gives management in relation to scheduling and hours of work, means that part-timers can be scheduled in ways that will minimize the number that qualify for benefits.
When it comes to excluding people who are most likely to need benefits, you can't get much more callous about it than that. No better way to control the cost of benefits than by making them inaccessible.
Better Off On Pogey
Then there's the weekly indemnity (sick pay) benefit. The maximum amount payable to RCSS part time workers who are off sick is 66 2/3% of their weekly earnings up to $413 per week. That's a little bit better than the 55% that a worker would get under federal Employment Insurance sick benefits (under EI sick benefits workers get 55% of their weekly earnings up to a maximum of $413 per week). An RCSS part-timer earning $7.15 per hour and working 24 hours per week would get $114.97 ($171.60 x .67) sick pay each week under the RCSS weekly indemnity plan and only $94.38 ($171.60 x .55) per week if she went on EI sick benefits.
The bad news is, however, that under the RCSS weekly indemnity plan, workers get sick pay for a maximum of 4 weeks only. EI sick benefits will pay them up to 15 weeks. So if they're sick with an illness that is somewhat serious or that may end up in their being off more than a month, they're better off on pogey - and the company's better off too.
The Amazing Pay-Your-Own-Frieght LTD Plan
Workers who need to be off longer may, after 17 weeks, qualify for Long Term Disability benefits. Their LTD plan pays 66 2/3% of their earnings to a monthly maximum of $1500. This sounds like a pretty good buck for somebody working part-time. Too bad no one earning the part-time wages the UFCW bargained for RCSS department store workers can gross that kind of money in a month. A worker at the top of the scale - $10.00 per hour - will gross about $960.00 in a month. A worker earning $7.15 per hour will gross about $686.00 per month. Two-thirds of those amounts are $643.00 and $460.00 respectively. Better than nothing? Check this out.
Here's a neat way of making it look like you're providing a good benefit without providing much of anything and making it more advantageous for workers to claim benefits available to them under federal income support programs.
Under the Canada Pension Plan workers who are off work for a prolonged period because of disability can claim a modest disability pension. The amount of the pension varies depending on how much they've contributed to the CPP. The minimum benefit is $382.17 per month. The maximum is $992.80. They can also claim a monthly benefit of $192.68 for dependent children. Workers aren't required to claim these benefits - but they can if they want to.
Under the RCSS deal, the amount to which a worker is entitled is deducted from his or her LTD payment. And it will be even further reduced by any payments that the workers' children qualify for as a result of his or her disability. According to the deal, a workers' LTD benefit -
"will be reduced first by disability or retirement amount entitled to under Canada or Quebec Pension Plan, and/or benefits under any Workers Compensation Act or similar benefits. LTD Benefits will then be further reduced if together with other income listed in the plan exceeds 80% of the pre-disability monthly earnings".
"Note: Other income includesbenefits other members of the family are entitled to on the basis of the employee's disability under Canada or Quebec Pension Plan".
While the practice of "subrogating" or reducing LTD benefits by other income received by the worker is fairly common in LTD plans, subtracting benefits paid to members of the worker's family is quite novel. When applied to the LTD benefits of part-timers who earn rock bottom wages, this double whammy subrogation can wipe out the workers' LTD entitlements and make the government sponsored disability benefits like the CPP a more attractive option - the only option.
What's really great about that is that it allows the employer and the union to boast about the great benefits they've negotiated without mentioning that the cost of looking after their disabled workers has been hived off on the state - which pays better. Here's how it works:
Let's say that a 24-hour per week part-timer who earns $7.15 per hour gets sick and goes on LTD. She has two dependent children. Her LTD entitlement will be $460.00 per month ($686.00 x .67). Chop off the $382.17 to which she's entitled from CPP and that leaves $77.83. Subtract $192.68 for the first of those two kids and that leaves... $0 from the LTD plan. She could, however, qualify for a total of $767.53 (398.17 + 192.68 + $192.68) from the CPP.
Just to be fair, let's try this again with a worker who is earning the top rate for RCSS part-time department store work - $10.00 per hour. This worker's monthly gross is $960.00. Two thirds of that gives him a monthly LTD benefit of $643.20 (remember this number, it's going to come up again soon). Subtract his minimum CPP benefit of $382.17 and that leaves $261.03. But he's got a kid who's eligible for $192.68. Subtract that and he gets a whopping $68.35 from the LTD plan. When we add that $68.35 to the $382.17 and $192.68 that he and his child will receive from the CPP, we get $643.20 - the very same amount as his LTD entitlement before the subrogation - but now the Canada Pension Plan is picking up most of the tab!
Notice how the company has shifted the cost of LTD benefits from itself to the federal government - to the workers themselves in fact. Now that's really sweet. If a worker's CPP entitlement is higher because he or she has contributed longer, the LTD program gets away with paying even less.
Who benefits from this mostly empty package? Everyone but the workers. Company recruiters can tell unsuspecting new recruits that, "we even have benefits for our part-time employees". UFCW machine heads can boast, "we even bargained benefits for our part-time members". Benefits administrators keep raking in their fees.
Despite the explosive growth of part-time work in the service industry, few non-union part-timers are entitled to medical and health benefits. Those whose employers provide them with benefit plans often complain that their benefits are inaccessible or inadequate or both. Thanks to their feckless leaders, thousands of UFCW members can now join the club.
An AFL-CIO reportclaims that part-time workers at Wal-Mart must wait two years to qualify for a benefit plan that has significant gaps in covered benefits ranging from lack of insurance for important preventive care to big out-of-pocket expenses. As a result taxpayers must pick up tab for workers and their dependents.
That's awful. Sounds a lot like what Loblaws is up to. Someone should tell the UFCW. Oh wait, the UFCW's helping them do it.
Coming up next: Weasel Words To Live By