Walmart is yet again taking action that reinforces its perception as a company with poor labor practices. A recent Reuters survey conducted this past month on 52 Wal-Mart stores, including one from every state, shows that 27 were hiring only temporary workers, 20 were hiring a combination of regular full, part-time, and temp jobs, and five were not hiring at all. What this shows is that many Walmart stores have only hired temps, the first time the large retailer has done so outside the holiday season. According to Walmart, this new hiring policy is to ensure “we are staffed appropriately.” But there might be a more sinister reason behind all of this.
The more likely reason for Walmart moving to change its hiring policies is to mitigate the effects of a potential rise in health care costs that are expected to occur due to the Affordable Care Act (ACA). Under the new regulations released on the ACA as summarized by WorldatWork, a nonprofit human resources association for professionals and organizations, employers must provide “minimum essential” and “affordable” health care to 95% of all full-time employees and their dependents. The ACA defines a full-time employee as any employee working on average 30 hours a week or 130 hours a month. Employers who do not provide adequate health care compliant with these standards would face a $2,000 fee for each full-time employee minus the first 30 employees. By bringing in temps hired on 180-day contracts Walmart can avoid adding to the number of people that it would have to provide health care benefits for in order to avoid the fee.
Not only is this new hiring practice disallowing new hires from accessing work benefits, but it is also hurting all of the other 1.3 million employees that Walmart employs. Imagine that you are a full-time worker at Walmart receiving on average 57 cents per hour less that the average retail-worker wage (approximately $923.40 less per year, working at 30 hours a week). Thankfully, you qualify to receive health care.
Now imagine that all of a sudden, your Walmart manager decides to hire a slew of temps that eat into the number of hours a week you can work. If Walmart is your only job, working as many hours as possible is a necessity and getting scheduled more hours is already an issue there, with associates sometimes getting as few as 19 or 22 hours per week. With these temps taking up scheduled hours, you are now at risk of losing your status of a full-time employee because you are not scheduled for the minimum 30 hours a week. Working less than 30 hours a week means you would become a part-time employee and lose health care benefits. In the end, Walmart benefits because not only does the company not have to pay its temps health care, but now by hiring more temps to be able to cover more shifts, Walmart can afford to change full-time employees into part-time employees and not have to provide them health care.
The Organization United for Respect at Walmart (OUR Wal-Mart), a group of recent and current dissatisfied Walmart workers, has protested outside of the company's annual shareholder conference this month and outside the company’s Bentonville, Arkansas headquarters calling for a commitment of full-time work and a minimum wage of $25,000 a year. One of OUR Walmart’s members Jordan Sparks even delivered a shareholder proposal that would require senior executives to hold a large portion of their shares until retirement, in hopes of aligning their interests with those of front-line employees. The proposal was voted down.
Even after all of this discontent from its workers, Wal-Mart continues to forge ahead with its hiring policy. For most companies that already provide adequate health care to their employees, the ACA and its new regulations are not poised to have a dramatic effect. But for Walmart, a company with poor labor practices that does not already provide adequate health care to its employees, the ACA forces it to make hard decisions to change its poor practices. Instead of trying to take actions to help its workers, Walmart is taking further action to hurt them. To quote one of my favorite Jib Jab parodies about a “Big Box Mart” employee, “Oh Big Box Mart / my paycheck reminds me / Your everyday low prices have a price / they aren’t free.”