Maryland requires Wal-Mart to pay more for health care

WASHINGTON — Maryland lawmakers Thursday bucked the will of the Republican governor and the nation's largest retailer, voting to become the first state to effectively require that Wal-Mart spend more on employee health care.

Supporters of the Fair Share Health Care Act said the retailing giant unfairly takes advantage of taxpayer-funded health-care plans because some workers are paid too little for them to afford Wal-Mart's health insurance.

"The taxpayers are giving a health-care subsidy to the largest retailer on Earth," said Democrat Kumar Barve.

The House and Senate, both controlled by Democrats, notched the three-fifths margins needed to override a veto last May by Republican Gov. Robert Ehrlich.

The law, which will take effect in 30 days, would require 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.

Critics of the legislation called it a dangerous precedent that ultimately would cost Maryland jobs.

Legislatures in more than 30 states are considering similar measures. Similar legislation died in the Washington state Legislature last year.

The Senate voted 30-17 for the bill after a filibuster attempt by Republicans. The House followed Thursday night with a 88-50 vote that handed Ehrlich a defeat on a bill he said is a government intrusion into business.

Wal-Mart spokesman Nate Hurst said the votes were driven by "partisan politics."

He said the company's lawyers were certain to look into whether the bill violates federal law. The Maryland Attorney General's Office issued an opinion this week dismissing those concerns.

The legislation has resonated in Maryland and beyond, in part because it is viewed as a relatively easy and inexpensive way for lawmakers to expand access to health care and because Wal-Mart, with a reputation for stingy benefits, is considered an easy target.

"We don't want to kill this giant. We want this giant to behave itself," said Anne Healey, a Democrat and the lead sponsor in the House.

Republican legislators opposed the bill, saying supporters were trying to punish an unpopular company. Opponents also predicted lawmakers would expand the bill to include smaller businesses. "This is a revenge bill," said Sen. E.J. Pipkin, a Republican. "This isn't about health care."

Democratic lawmakers countered that the bill was intended to make large employers pay their "fair share" of health costs.

Wal-Mart says that more than three-quarters of its sales associates have health insurance but acknowledged that some of its low-wage workers are on Medicaid, the state insurance program for the poor.

Ehrlich's chief of staff, Chip DiPaula, said Thursday night that lawmakers had started "marching down the road to socialized medicine."

The decision is being watched by 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 Wal-Mart Watch, funded by a union.

The unions have said the states they will focus on include Colorado, Connecticut and Washington.

The company faces legal pressure nationwide. 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 appeal the class-action certification in Philadelphia.

Material from The Associated Press and Baltimore Sun is included

in this report.