Sodexo backs away from change in full-time employee rules
BURLINGTON -- Multinational food services provider Sodexo has rescinded a 2013 decision that would have halted health care benefits for some of its food services workers.
After coming under fire for the decision last fall, the French company announced Thursday that it will restore health benefits to the approximately 30 Vermont employees who were affected by the change in the way the company recognized full-time employees.
In January, approximately 5,200 of the total 133,000 Sodexo employees nationwide will once again be eligible for company health plans. Sodexo employs 1,000 Vermonters in 27 locations, about 3 percent of whom lost their benefits, Sodexo spokesperson Enrico Dinges said. The company provides food services to the University of Vermont, St. Michael's College, the Vermont State Colleges, Norwich University and other institutions.
Vermont State Colleges Chancellor Tim Donovan said Friday he did not have enough information to comment on the decision, though he did say that Sodexo had scheduled a meeting with VSC officials next week.
Sodexo announced in September that it would reclassify some employees as part-time workers, making them ineligible for health care coverage. Though many food services employees work at least 40 hours during the academic year, the company planned to average their work hours over a 52-week cycle, Dinges said. The total averaged out to less than the 30 hours a week minimum for health care coverage, a figure designated by the Affordable Care Act.
Now, said Dinges, "we're going to credit our employees with their time they haven't worked over the year." The company has conducted an economic analysis "that showed that we could remain competitive and still reward our employees," Dinges said.
The proposal to reclassify workers drew a sharp response in Vermont after it was announced last fall. Sen. Philip Baruth, D-Chittenden, told VTDigger that he received a barrage of email complaints from Sodexo workers, though there was little public comment on the matter.
On Baruth's request, Vermont Commissioner of Labor Annie Noonan determined that Sodexo's reclassification was legal. Baruth then took a different tack against Sodexo, introducing a bill banning penalties for employees who took sick leave. The bill passed in the Senate, but stalled and was voted down in the House.
"They were clearly making a legal decision that was designed to fatten their bottom line at the expense of their workers. It really had nothing to do with Obamacare," Baruth said of the correction. "It took about three questions to get them to admit that."
Dinges, however, said the decision was made to increase inconsistency and improve efficiency across branches of the multinational company.
"Last year, it was really about being competitive in the market, seeing what other companies around us were doing, and complying with the Affordable Care Act," he said. "We were making a policy that would allow us to track full-time work consistently across the board. If you have this many employees, you have to make a tracking system that is pretty comprehensive."
Dinges estimated that the increased health care costs the company is taking on would have an economic impact "in the tens of millions."
According to previous reports, UVM has 320 Sodexo employees, and last fall, former VSC spokesman and VTC interim president Dan Smith said the system's four campuses (VTC-Randolph, Johnson, Lyndon and Castleton) employed 109 full-time Sodexo workers. A total of 69 of those employees would be affected by the change in eligibility requirements, 23 of whom receive health insurance through Sodexo, Smith said at the time.
UVM, St. Michael's College and the Vermont State College system refused to approve the proposed changes in their contracts with Sodexo. Donovan said that the VSC made the decision due to a lack of information. UVM President Tom Sullivan wrote a letter prohibiting Sodexo from moving forward "until further notice."
"It is part of Sodexo's contract with UVM that major changes in personnel policy need to be approved by the university. That was the case here, and we advised that Sodexo put the policy change on hold while we reviewed its implications," said Tom Gustafson, Vice President for University Relations and Administration.
Sodexo and UVM officials said they were unable to comment Friday on whether Sodexo actually went through with the proposed changes.
Baruth, who is also employed as a UVM English professor, acknowledged the company's change of heart.
"To give them their due, they were a generous employer," he said. "Because of the seasonal nature of the college work, Sodexo has traditionally recognized their employees as full-time workers. The decision to reclassify was really out of character. Now I think they came to their senses."
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