9/17/2005 Update: Mayor Michael Bloomberg vetoed this bill.
Grocery and big-box retailers in New York City will be required to contribute a set minimum to their employees’ health insurance, under an ordinance passed by the City Council on a 46 to 1 vote.
The law will force chains such as Wal-Mart, BJ’s, and Whole Foods to change their labor practices.
The Health Care Security Act requires any grocery store with 35 or more employees or any retailer larger than 10,000 square feet to contribute $2.50 to $3.00 towards health care for each hour an employee works.
City Councilors said the measure was necessary to prevent employees from having to rely on public health programs paid for by the city and state. The law will expand health care for up to 6,000 employees in the grocery industry and protect coverage for 21,000 employees now receiving health care through their employers.
The measure drew strong support from most of the city’s grocery retailers, who are already providing health insurance for their employees, but are facing competition from a growing number of gourmet food stores, big-box retailers, wholesale clubs, and natural food chains that either do not offer health care or require their employees to pay most of the premium.
The law’s passage marks one of the first times that a broad base of businesses have supported legislation to set minimum standards for employee compensation.
“When my competitors drop health care for their workers, they’re not only hurting their employees, they’re hurting mine,” said John Catsimatidis, Chairman and CEO of Gristedes, a 100-year-old chain of about four dozen grocery stores in New York. “If I have to compete with low-road, cost-cutting employers like Wal-Mart, it’s going to be hard for me to continue to provide my employees with the care they deserve.”
The measure was also supported by the Neighborhood Retail Alliance and by many small, independent grocery stores, a growing number of which are unionized and provide union-level wages and benefits.
“The Health Care Security Act is a pro-business response that protects both the responsible employers who currently provide health insurance as well as the taxpayers who are seeing an increasing pressure put upon the publicly financed health care system in our City,” said City Councilor Christine C. Quinn.
Wal-Mart is aggressively courting New Yorkers and scouting for locations for what would be its first store in the city. A broad coalition has formed to keep the corporation out.
Mayor Michael Bloomberg has threatened to veto the measure on the grounds that federal law prohibits cities from regulating employer health plans. City Councilors are confident they do have such authority. They only need 34 votes to override a veto.
The Health Care Security Act was designed by the Brennan Center for Justice and enacted through a broad campaign of business leaders, labor unions, and community groups organized by New York Jobs with Justice. The Brennan Center is working with other communities to pass similar measures.
Legislation has also been introduced in several states that would require certain groups of retailers to contribute a minimum to employee health insurance. A bill applying to retailers with more than 10,000 employees passed in Maryland last year, but was vetoed by the governor. Supporters have vowed to override the veto during the next legislative session.