Elkins Park co-op restructure causes concern for employees

Posted: January 18, 2014

ELKINS PARK The Creekside Co-Op in Elkins Park has eliminated employee health insurance and outsourced its payroll, sparking some consternation among employees of the struggling community-owned grocery.

Some employees said morale dropped in mid-December when they were told they would have to find their own health insurance, and were ordered to fill out "new hire" paperwork that included a detailed medical history and waivers for random drug tests.

Jeff Rotter, president of the co-op board, said the moves were necessary because, a year after opening, the store still isn't profitable, and costs for worker compensation and employee health insurance were going to rise significantly.

For chef Chuck Schwinger, health insurance was one of his main motivations for working at the co-op. He quit in December.

"I'm not angry," Schwinger said. "It's strictly a business decision. I understand that."

But getting only two weeks' notice before the cancellation was unfair, Schwinger and others said.

Employees were paying about $100 a month for their health premiums, and some are struggling to line up new coverage, said a current employee who did not want to be named for fear of retribution.

"I was able to get insurance through the Affordable Care Act," she said, but it's costing her twice as much. "There were people who weren't able to come up with the cash on such short notice."

Rotter said the co-op tried to compensate for the lost benefit by raising employees' salaries, but he would not disclose the amount.

The store also learned in September that its worker-compensation insurance would not be renewed. More than a dozen other providers refused coverage, and one offered a price 70 percent higher than the co-op paid in 2013.

So the store signed a contract with Quality Business Solutions, a South Carolina company that would take over payroll, manage benefits, and provide worker compensation insurance and other human-resources services.

Quality Business Solutions is now listed as the staff's "co-employer," but day-to-day operations have not changed, said general manager Mike Litka.

The co-op has helped anchor a revival in the area around the Elkins Park train station. Since opening in November 2012, it has achieved strong membership numbers but is still working on increasing revenue.

In 2013, the store cleared about $4.85 million in sales. To cover operating expenses, build a reserve and pay off debt, the annual target is about $6.2 million, said Rotter.

Among both members and employees, there was some confusion about what changes were happening and why. Rotter said he could not recall whether members were notified of the change but said the board had been elected to make these kinds of decisions.

"I haven't gotten any response from members one way or the other," he said.


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