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Obamacare's economic consequences on Nevada's casino workers

Published on October 25, 2014, 4:32 pm

by Jeff Grant Twitter account Jeff Grant LinkedIn account

Culinary Workers Union Local 226
Culinary Workers Union Local 226

Casino workers who belong to Nevada's Culinary Workers Union Local 226 have long enjoyed 100 percent-funded health care premiums from their employers. Because of added Obamacare costs, that benefit has been called into question.

The union's health care fund is facing more and more nickel and dime charges brought on by mandated Obamacare. Some for-profit companies that employ low-income workers qualify for a federal subsidy to counteract the rising costs of Obamacare, but because the Local 226 is a union, it does not.

The union's political director, Yvanna Cancela, hinted that the White House ought to extend its Obamacare subsidy to unionized workers. “The administration has . . . (met) other groups' needs,” she said. “Our members want to keep their health plans.” This last statement was presumably made in reference to President Obama's promise that “If you like your health care plan, you can keep your health care plan.”

Members of Local 226 do indeed like their health care plan, but their ability to keep it has been challenged by rising healthcare costs imposed by the president. Unions across the country have, in fact, expressed dismay and feelings of betrayal at the fact that their organizations don't have the same access to federal exemptions that other groups do. The reason for this is that union health plans are considered to be “group plans” as opposed to “market plans.”

The Threat of a Strike

Tensions ran high this past spring in Las Vegas as the Local 226 geared up for a negotiation deadline of June 1. The possibility of a strike grew stronger as summer approached. Union members prepared themselves to walk off the job and sent threatening letters to casino investors and analysts warning them of this possibility. As it was, the workers had been operating under an extension of a contract that officially expired almost a year earlier, on June 1, 2013.

A strike of the Local 226 workers would be catastrophic for Sin City's business, as the union represents approximately 55,000 casino workers and 70,000 dependents. Some, but not all, casino giants had already approved the proposed contract as of last spring. Approving businesses included MGM Resorts International, Caesars Entertainment, the Tropicana, and the Riviera.

Since 2010, the union has had to pay $23 million to cover workers' dependents up through the age of 26. This staggering cost, coupled with an anticipated reinsurance fee of $7 million, left much of the Vegas casino industry holding their breath as negotiations approached.

Crisis Averted: Local 226 Will Not Strike

Howard Stutz (Las Vegas Review-Journal)
Howard Stutz (Las Vegas Review-Journal)

Thankfully, union members and their employers were able to reach a deal and avoid the pending strike in early June. Negotiations went through the night of May 31 and into the wee hours of June 1.

Las Vegas writer Howard Stutz quipped in a subsequent editorial for the Las Vegas Review-Journal that there was never actually going to be a strike. According to Stutz, “Downtown was not the concern.” The real, masked concern was for workers employed by Station Casinos, a group who is not overseen by an organized labor association. For 10 years, the Local 226 has courted Station Casinos, the employer of approximately 13,000 Las Vegas casino workers. According to Geoconda Arguello-Kline, the Local 226 secretary and treasurer, the union wants to “make sure that other casino workers . . . who aspire to the same union standard of living will be able to join or union family soon.”

Local 226: Station Casinos Needs Union Representation

Back in 2011, the National Labor Relations Board (NLRB) found Station Casinos guilty of committing almost 90 unfair labor violations. Two years later, in 2013, the NLRB announced that Station Casinos had mended its ways and closed their case against the company. Station Casinos has said that they don't mind if their workers want to unionize, but the process must be agreed upon via secret ballot and the NLRB must oversee the change. As of yet, however, no such vote has been scheduled for the workers at Station Casinos.

Stutz predicted that before the year's end, the Las Vegas public can “expect to see Culinary . . . members holding informational pickets in front of Station Casinos' properties.”

Station Casinos Properties

Station Casinos has conducted business in Las Vegas since 1976. The corporation operates a total of 11 Nevada gambling houses, listed below:

Located In Las Vegas:

  • Boulder Station
  • Fiesta Rancho
  • Palace Station
  • Red Rock Casino, Resort, and Spa
  • Santa Fe Station
  • Texas Station

Located in Henderson, Nevada:

  • Barley's
  • Fiesta Henderson
  • Green Valley Ranch, Resort, Casino, and Spa
  • The Greens Gaming and Dining
  • Sunset Station
Roadmap of the Las Vegas Station Casinos properties
Roadmap of the Las Vegas Station Casinos properties

Nevada: A Right-to-Work State

Not all states in the US are “right-to-work” states. In Nevada, however, citizens have a choice whether or not they join a union. Union members are not permitted to pressure or coerce non-union members to join their cause or pay dues.

Local 226 Gets Wrist Slap for Coercion

Last May, Judge Dickie Montemayor asked Local 226 were asked to stop “restraining or coercing employees” to join the union. The admonishment came after an employee at Paris Las Vegas complained that she had been harassed to join and start paying dues. According to a source, a union steward told the worker that she and her family would lose their insurance and other benefits if she didn't start paying the money.

The steward also warned the worker that she would be relegated to more menial tasks on the job if she didn't comply with the union's request for fees. The steward denied the severity of the charge. He defended his conversation with the employee, saying that he told her it would be bad for “all employees” if the union does not receive enough financial compensation.

For now, the Local 226 has its contract and it looks as though insurance and other benefits have been preserved. As Obamacare continues to be debated by US politicians, this situation is likely to evolve.


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