Retailers challenge benefit mandates in Md., N.Y.

A group of retailers has filed suits challenging laws in Maryland and New York that were enacted to pressure employers to spend a minimum amount on their employees’ health benefits.

The Retail Industry Leaders Association claims that the so-called “fair share” statutes unlawfully mandate specific expenditures by employers, single out the retail industry, and threaten to eliminate the flexibility businesses require to meet the needs of their workforce.

The suits were filed in U.S. District Courts in Baltimore and Brooklyn. The Maryland law requires firms with more than 10,000 workers to spend at least 8 percent of payroll on health care or donate the difference to the state Medicaid fund. Wal-Mart is the only company that meets the criteria. In New York’s Suffolk County, the law targets large, non-unionized food retailers by requiring them to make health care payments of at least $3 per hour worked.

“We all agree that access to health care is vital, but these spending mandates will drive away business and discourage job creation,” said Brad Anderson, RILA chairman who is also chief executive officer of Best Buy Co. Inc. “They’re simply unlawful and unwise.”

RILA asserts that state and local laws regulating employee benefit plans are invalidated by federal law, specifically the Employee Retirement Income Security Act. RILA also claims that the statutes violate the equal protection clause of the U.S. Constitution because they single out individual companies for arbitrary treatment.

Supporters of the laws say they are needed because the public is underwriting the cost for many Wal-Mart employees who can’t afford their share of premiums.

Maryland Attorney General J. Joseph Curran has advised that the law does not violate ERISA since it does not specifically refer to employee welfare benefit plans.

Labor unions support the mandates and have vowed to pursue similar legislation in at least 30 other states.