October 13, 2005 in Business

REI extends medical benefits to part-timers

Associated Press
 

SEATTLE — Recreational Equipment Inc. is extending medical benefits to all its employees, no matter how many hours they work.

Meanwhile, Mervyns, based in Hayward, Calif., is making many sales associates part-timers and dropping benefits for all but full-time staff.

REI, based in Seattle, has long been listed as one of the “100 Best Companies to Work For” by Fortune magazine.

“We’ve long been a leader in terms of giving benefits to employees with 20-plus hours per week,” REI spokesman Randy Hurlow said. “Now we are extending medical benefits to all employees — including part-time, even seasonal — if they have worked with us for 30 days.”

According to the Employment Benefit Research Institute in Washington, D.C., the proportion of part-time workers receiving health benefits rose from 18.6 percent in 1999 to 19.1 percent in 2003, but the proportion of full-timers with health benefits slipped from 62.9 percent to 62.2 percent.

Many companies have held down costs in recent years by keeping worker hours low and providing benefits only to full-time employees.

Cash-strapped Mervyns, for example, said in a letter to affected workers last week that “all hourly associates” except supervisors will become part-timers in March and that benefits for part-timers such as health, disability and life insurance, sick leave and vacations will be eliminated, The News Tribune of Tacoma reported.

Spokeswoman Katie Winter said Tuesday the change would affect less than 15 percent of Mervyns’ “total store associate population,” including managers.

A Mervyns worker at the Tacoma Mall told the newspaper the move would affect most workers at her store.

Mervyns, owned by Sun Capital Partners, announced plans last week to close 62 stores — none in Washington — and lay off 4,800 workers, leaving 193 stores in Washington, California and the Southwest, each with 70 to 100 employees.

Workers dropped to part-time status can buy short-term health insurance under the Consolidated Omnibus Budget Reconciliation Act, known as COBRA, but the cost for an average family of four runs to $900 a month, likely too much to afford for workers who typically earn $7.35 to $11 an hour, the Tacoma employee told the newspaper.

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