Wal-Mart Reconsiders Its Future in State; Health Benefit Mandate Could Cancel New Stores

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Executives for Wal-Mart Stores Inc. are debating whether to cancel plans for new outlets in Maryland in response to a new state law requiring the discount retailer to provide a certain level of employee health benefits, a company official said yesterday.

Officials at the Arkansas-based company also are considering challenging the law in federal court, in addition to scrapping plans to build outlets such as a store at Capital Plaza Mall in Landover Hills and a distribution center on the Eastern Shore, Wal-Mart spokeswoman Rhoda M. Washington said.

"That's in the range of possibilities," Miss Washington said.

The Democrat-controlled General Assembly passed the law Thursday over the veto of Gov. Robert L. Ehrlich Jr., a Republican. The party-line decision drew national attention and made Maryland the first state to legislate against Wal-Mart's health care policies.

The new law, which takes effect Jan. 1, directs companies with more than 10,000 employees in the state to dedicate at least 8 percent of payroll to employee health care or pay an equivalent amount into the state's Medicaid fund.

Wal-Mart, which employs nearly 17,000 Marylanders, has provided about 4 percent of its payroll for health benefits.

The law currently applies only to Wal-Mart because all other large employers in the state, such as Northrop Grumman, already provide the mandated level of health care benefits.

The AFL-CIO is spearheading a campaign for other state legislatures to enact similar laws against Wal-Mart, which employs about 1.3 million workers nationwide.

"More than three-fourths of Wal-Mart associates have health insurance," company spokeswoman Sarah Clark said Thursday. "And every Wal-Mart [worker] in Maryland - both full-time and part-time - can become eligible for health coverage that costs as little as $23 per month."

Yesterday, Miss Clark said the U.S. Chamber of Commerce and the Maryland Chamber of Commerce have questioned the law's validity, and "that is something our attorneys are looking into as we decide our course of action. …