California Apparel News

The long and drawn-out contract negotiations between the International Longshore and Warehouse Union and the Pacific Maritime Association took a giant step forward.

Both sides announced on Aug. 26 that they had “reached a tentative agreement on terms of health benefits subject to agreement on the other issues in the negotiations.” Neither side would go into further detail about the agreement.

Health benefits had been expected to be one of the biggest hurdles in the negotiations that started May 12 in San Francisco to hammer out a new six-year contract that expired July 1.

The contract talks cover nearly 20,000 full- and part-time workers at 29 West Coast ports.

In the past, contract negotiations have been stuck on issues such as automation and technology.

This time, the issues have been centered around a generous healthcare plan provided by the employers. Currently, longshore workers pay nothing for their healthcare coverage and only $1 for prescriptions even though they are among some of the highest-paid blue-collar workers in the United States with yearly wages hovering around $100,000.

Under President Obama’s Affordable Care Act, these generous healthcare plans will be subject to a “Cadillac tax,” which will cost employers millions. The rationale for the tax is to rein in bloated healthcare plans that raise medical costs and to help fund Obamacare.

This “Cadillac tax” calls for a 40 percent excise tax on employer-sponsored plans spending more than $10,200 per employee or $27,500 per family.

Starting in 2018, PMA members will have to pay a hefty $150 million tax on the healthcare plans provided to longshore workers.