For many employees, their compensation is much more than the final total they see on their paycheck every two weeks. That is because many employers provide a range of other benefits which are critical, including vacation time, sick leave, retirement support, and health care insurance. It is important not to view these additional amenities as “extra” services or “bonuses” that employers provide out of the goodness of their heart. They are simply part of an overall package that employees consider when deciding whether or not to take a job or stay in a job.
In that way, changes to these forms of compensation must be evaluated carefully. It is usually not acceptable for employers to simply make edits in such a way that lowers the compensation that employees receive, particularly if it violates employment law or employment agreements.
Public Employees in Washington & Obamacare
In recent years, this topic has made national headlines in relation to health insurance. Of course, many Washington residents receive health insurance via their employer. Yet, many companies are making changes to these arrangements, often requiring employees to pay a larger share of costs or, occasionally, dropping coverage altogether. All of this was made more complicated with the passage of the “Affordable Care Act” (Obamacare), a federal law that enacts different requirements on employers and citizens with the goal of increasing insurance coverage.
The new measure is already resulting in some changes for Washington employees. For example, state officials are actually weighing whether to change the health plans of some public employees, shifting them into an “insurance exchange” created as part of the federal law.
As a Huffington Post story last month summarized, the change would likely affect only part-time state employees as well as Washington education workers. The basic benefit for state purposes is that it would shift the costs of insuring those employees onto the federal government, instead of being paid for by Washington state. All told, this might result in a $120 million shift–not a meager amount.
The Affordable Care Act requires that employers provide insurance coverage to all employees who work more than 30 hours a week. However, Washington already provides insurance for those who work 20 hours a week.
Policymakers are considering eliminating health insurance for those employees who currently work between 20 and 30 hours. In exchange they will offer these employees additional compensation. Also, those employees would likely qualify for health care from the federal government. Supporters argue that it is a win-win. Employees may receive increased compensation while still receiving health care insurance. The state would also save a significant amount of money to cover budget shortfalls.
However, there are many smaller details that need to be ironed out. For one thing, many workers are leery that this will all actually work out as planned. Union representatives for some employees who may make the shift worry that the increased compensation, perhaps $200 a month for the average worker, is too low to make the shift (and risk) worthwhile. That is especially true because the increased compensation will be taxed–the health insurance benefit was not.
If you have any questions about these compensation issues, be sure to contact a Washington employment lawyer for tailored advice.