July 23, 2014
By Steven Wishnia
New York—Local 1199 SEIU and the League of Voluntary Hospitals and Homes of New York announced July 21 that they had agreed on a four-year contract covering about 70,000 health-care workers in the metropolitan area. The deal gives them a total raise of 13% and largely preserves the system of funding health benefits, a major issue in the talks.
The raises will come in four increments: 3% in October 2014 and 2015, and 3.5% in the two years after that. Local 1199 members will vote on the agreement over the next week and a half at each of the 109 hospitals and nursing homes involved. It also sets a pattern for contracts covering about 40,000 more members, said union spokesperson Dave Bates.
These increases are a good bit more than what 1199 members got after the beginning of the Great Recession, when they “sacrificed raises” in order to shore up the union’s benefit funds, Bates said.
The deal slightly modifies the way benefits are paid for—the most contentious element of the contract talks—without significantly changing the basic mechanism. Currently, all employers pay the same percentage of their payroll into the union’s benefit funds. The larger hospitals, which have more skilled workers such as registered nurses than the smaller nursing homes and thus pay more per capita, called this a “subsidy” and wanted to change to a flat per-employee contribution. The union argued that this would dramatically increase costs for smaller employers and thus lead to “immediate massive cuts” in benefits for 55,000 workers, said Bates.
Under the compromise reached, employers will still pay a percentage of their payroll, but there will be a limit on how much they have to pay each year, and the amount they contribute that’s more than what the fund actually spends on health care will be gradually reduced. This preserves all current benefits, including health-care coverage with no out-of-pocket expenses, and will give the union time to develop other solutions, said Bates. A League spokesperson echoed that sentiment, saying it “will give 1199 time to gradually negotiate increased (and we think, fairer) contributions from for-profit institutions.”
A third major issue in the talks was unionizing the growing field of outpatient and ambulatory-care clinics. Local 1199 projects that the metropolitan area’s “big five” hospital chains—North Shore-LIJ, New York University, Mount Sinai, Montefiore, and Presbyterian—will add 45,000 jobs in such facilities by 2018. “This is where the industry is headed,” says Bates. The contract, he added, holds that management will not interfere with union efforts to organize workers, and will “respect the choice of workers” if they decide they want a union. Whether that choice will be determined by card check or vote hasn’t been decided yet, he said.