Maryland legislators voted Thursday to enact a first-in-the-nation requirement that Wal-Mart Stores Inc. spend more on employee health care. The measure, touted as a money-saver for the state-supported Medicaid program, takes effect despite the governor’s veto of the bill.
Labor unions have said they are seeking similar legislation this year in at least 30 other states. Supporters say the retailing giant unfairly takes advantage of taxpayer-funded health care plans because some workers can’t afford Wal-Mart’s health insurance.
“The taxpayers are giving a health-care subsidy to the largest retailer on earth,” argued Democratic Delegate Kumar Barve. The House and Senate, both controlled by Democrats, both notched the three-fifths margins needed to override a veto last May by Republican Gov. Robert Ehrlich.
The bill requires companies with more than 10,000 Maryland employees to spend at least 8 percent of their payroll on employee health care or pay the difference into the state’s Medicaid fund. Of the state’s large employers, only Wal-Mart spends less than 8 percent on health care.
The company employs about 17,000 Marylanders at more than 40 Wal-Mart and Sam’s Club stores, and about 1.3 million people nationwide.
Claims of ‘a slippery slope’
Critics of the legislation called it a dangerous precedent that ultimately would cost Maryland jobs.
A Wal-Mart executive called the bill a poorly worded mandate for a single company. Wal-Mart spokeswoman Mia Masten said Thursday that the bill “could be the beginning of a slippery slope.”
“We believe everyone should have access to affordable health insurance, although this legislation does nothing to accomplish that,” said Masten, who said the retailer may partially pull out of Maryland because of the bill.
She said Wal-Mart was unfairly singled out because of “partisan politics” and that Medicaid’s problems go beyond the behavior of one company.
The veto override had been one of the session’s most intensely lobbied, with business groups taking out print ads supporting a veto and labor groups rallying and taking out their own ads siding with supporters.
The decision is being closely watched by labor unions and legislatures around the country.
“We expect that today’s vote will generate important momentum in many other state legislatures,” said Nu Wexler, a spokesman for Washington-based Wal-Mart Watch, which is funded by a union.
The unions have said the states they will focus on include Colorado, Connecticut and Washington.
Harsh words for retailer
Some Maryland Democrats had harsh words for Wal-Mart. “Don’t dump your employees that you refuse to insure into our Medicaid system,” said the bill’s sponsor, Sen. Gloria Lawlah.
In the House, Delegate Anne Healey compared Wal-Mart to a schoolyard bully. But House Republican Leader George Edwards called the measure an unwarranted intrusion into private enterprise.
“If you don’t want to work for Wal-Mart, no one’s twisting your arms. Go somewhere else and work,” Edwards said.
The company is under legal pressures around the country.
In Pennsylvania, a judge this week approved a class-action lawsuit by employees who say the company pressured them to work off the clock. Last month, a California jury awarded workers $172 million for illegally denied lunch breaks, and Wal-Mart settled a similar Colorado case for $50 million.
The company is appealing the California verdict and may pursue an appeal of the class-action certification in Philadelphia. A spokeswoman for Wal-Mart, Sarah Clark, said a law like Maryland’s “does nothing to help the 46 million uninsured individuals in this country.”