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Maryland Law Could Force Wal-Mart to Spend More on Health Care

I'm Steve Ember with the VOA Special English Economics Report.

A new state law in Maryland says large companies must spend at least eight percent of their total wages on health care. If not, then they will have to pay the difference to the state to help provide health care to the poor. The amount for non-profit employers is six percent.

The new law is called the Fair Share Health Care Fund Act. It will affect only companies with ten thousand or more employees in Maryland. At least four companies are that big. But only one is known not to meet the new requirement: Wal-Mart Stores. The legislation became known as "the Wal-Mart Bill."

Wal-Mart employs about seventeen thousand workers in Maryland, and more than a million nationwide. It has faced a lot of criticism about its employment policies.

The Maryland law is the first of its kind in the fifty states. Labor activists say they will try to get more than thirty other states to pass similar legislation.

America's biggest labor group, the AF.L.-C.I.O., says fewer employers offer health coverage than five years ago. It notes that many workers in low-paying jobs, including some at Wal-Mart, have to be covered by Medicaid. Medicaid is a state and federal program that provides health care for the poor.

Maryland Governor Robert Ehrlich vetoed the legislation last May. He called it bad policy. He said it sends an anti-business message and does little to deal with the national problem of limited health care for the poor. But earlier this month Maryland's Democratic-controlled legislature voted to cancel the veto by the Republican governor.

Wal-Mart strongly opposed the law. The company told Maryland lawmakers that it spends between 7 and 8 percent on health care. It says less than one-half of one percent of Maryland workers without health insurance work at Wal-Mart.

It says more than three-fourths of its employees have health insurance. And it says every Wal-Mart employee in Maryland can gain health coverage for as little as twenty-three dollars a month.

Wal-Mart and business groups like the United States Chamber of Commerce say the law will hurt companies that create jobs.

Wal-Mart could try to stop the new law in court. It says Maryland lawmakers, in its words, "placed the special interests of Washington, D.C., union leaders ahead of the well-being of the people they serve."

This VOA Special English Economics Report was written by Mario Ritter. Read and listen to our reports at I'm Steve Ember.