Marriott to Maintain Benefits for Full-Timers
Saturday, July 11, 2009
Marriott International yesterday said it will allow full-time workers relegated to part-time status to keep their health benefits, a move aimed at easing the pain for employees affected by the recession.
The Bethesda-based hotel chain will stop requiring its U.S. workers to log a minimum number of hours to maintain existing health coverage through the end of this year, according to chairman and chief executive J.W. "Bill" Marriott Jr., who announced the decision on his blog.
"During these tough times, it has become more difficult for employees at many U.S. companies, including Marriott, to work a sufficient number of hours to continue to qualify for health benefits," he wrote.
Employees worried about losing their coverage cannot perform at their highest levels and businesses cannot prosper if their workers do not have access to quality health care, Marriott wrote. "For that reason, we have taken steps to ensure that our full-time employees in the U.S. who are working reduced hours will not lose their health care coverage."
Across the country, the number of people who have had their job status reduced from full-time to part-time rose to 9 million last month from 5.5 million in June 2008, according to the Bureau of Labor Statistics.
Typically, employees who have their workloads reduced below 20 or 30 hours either are ineligible for health care benefits or are required to pay a much higher portion of the costs, human resources experts say.
Marriott "is going against the grain," said Shub Debgupta, senior director of the benefits roundtable at the Corporate Executive Board. "This is something you don't see -- it's very commendable."
The economic downturn has been particularly hard on hotels, which have suffered amid declining business and leisure travel. While hotels in Chicago and San Francisco have experienced steep losses, those in the Washington area are faring much better. Occupancy rates dropped by 1.8 percent in 2008 in the region, compared with 4.2 percent nationwide. The area's revenue per available room -- a key measure of hotel performance -- is projected to decrease 9 percent this year, compared with the national decline of 12 percent.
Still, the local convention business has suffered, in part because of delays in getting a Marriott hotel built adjacent to the Walter E. Washington Convention Center. The delays have prompted many groups to cancel conventions planned for this area and book them in other parts of the country, according to Destination DC, the city's tourism organization. The reduced business and the economic downturn led to layoffs and reduced hours for many workers, experts said.
John A. Boardman, executive secretary and treasurer of Unite Here Local 25, a union representing about 5,000 hotel workers in the region, said that 8 percent of his members have lost their jobs and that about 10 percent have had their hours reduced.
"People are calling and saying, 'My child is in treatment' or 'I have diabetes. How am I going to pay for the care?' " Boardman said.
The loss of business also is affecting hotels' performance. Marriott reported first-quarter earnings of $87 million, a 29 percent decline from the same period last year.
Employees at Marriott who work 30 or more hours are eligible for health-care benefits. Some workers have had their hours reduced below that threshold because of the economy, company spokesman John Wolf said.
"As people in headquarters went out to the field they began to hear about [the health-care] issue as they talked to general managers. That's why we implemented this policy," Wolf said.
The move takes effect in in every state except for Massachussets, which has a law governing employment status.