Downtown union workers forgo big pay hikes to keep health care

Wednesday, July 3, 2002 | 11:10 a.m.

The new five-year contract for downtown casinos protects free health care for Culinary Union members, but leaves them with far less money for wage hikes than Strip workers.

"They understand that wage increases will not be large in the course of this contract," Culinary Secretary-Treasurer D. Taylor said Tuesday. "They made a choice that their health benefits were the most important thing economically to them."

In all, according to a summary union leaders handed out to downtown workers Tuesday, the agreement provides for $2.20 in hourly increases in benefits and wages for each employee over five years.

That comes out to $1.04 less per hour than the nearly $3.24 in hikes outlined in the Strip contract, the richest ever for the Strip. Union leaders said the downtown agreement also is the richest there, topping the previous five-year contract of $1.95 in hourly wage and benefit increases.

Most of the money in both new agreements will be pumped into the union's struggling health and welfare fund to meet rising medical costs and continue free health-care coverage for union workers.

Taylor estimated that maintaining the same level of health benefits could cost members an additional $1.70 to $2 an hour over the next five years.

That could leave downtown workers with as little as 20 cents an hour for pay raises over the length of the contract, compared with a minimum of $1.24 in hikes for Strip workers.

There will be no wage increases for downtown and Strip workers in the first year of their contracts. The downtown casinos, as with their Strip counterparts, have agreed to give the union health fund an extra 65 cents an hour for each employee. That will raise the employer contributions throughout the industry to $2.87 an hour.

Every casino also will contribute an additional 3 cents to the union's pension fund.

The big economic difference between the downtown and Strip contracts comes in the remaining four years, where the union has the option of allocating additional funds from the employers toward wage increases or the health and pension funds.

Strip employers will contribute hourly increases of 60 cents the second year and 65 cents the third, fourth and fifth years, while downtown casinos will pay 30 cents the second and third years, 44 cents the fourth year and 48 cents the fifth year.

On Tuesday, at a meeting to ratify contracts at eight downtown casinos and the nearby Castaways on Boulder Highway, union leaders informed workers that they don't know what kind of money will be available for wage hikes because of the uncertainty over rising health-care costs.

The news apparently did not stop union members at the Castaways, Fremont, Main Street Station, Fitzgeralds, Four Queens, El Cortez, Plaza, Las Vegas Club and Binion's Horseshoe from overwhelmingly approving the contract. The vote for the downtown hotels and the Stardust on the Strip was 808 to 3 in favor of the contract.

The union gave several additional concessions to three of the more economically distressed properties, the Horseshoe, Castaways and Las Vegas Club.

In the first year of the contract, while the other hotels and those on the Strip must begin making contributions immediately to the health fund, the Las Vegas Club is allowed to defer its payments until December. The Horseshoe and Castaways have until next May to make their contributions.

Even though the payments are being deferred at those casinos, employees there will get the same health coverage, union leaders said.

The Horseshoe and Castaways are getting additional breaks in the remaining four years of the new contract, according to the summary provided by the union.

Both casinos don't have to pay the wage and benefit increases in each of those years for up to 11 months after the other casinos make their contributions to the union.

In the third and fourth years all downtown casinos, including the Horseshoe and Castaways, will be able to split their contributions -- 44 cents and 48 cents per hour respectively -- into six-month intervals of 22 cents and 24 cents.

In another major difference from the Strip contract, new employees will be hired at most downtown hotels at 80 percent of the salary of current employees in their first year. They will the rise to 85 percent in their second year, 90 percent their third year, 95 percent their fourth year and 100 percent their fifth year.

Wages for new workers at the Las Vegas Club, Horseshoe and Castaways will remain at 80 percent for all five years of the contract.

Downtown employees leaving the vote at Stardust's convention pavilion said they understood the downside to their contract.

"It's not as much as the Strip, but we're happy that we have a better contract now," said Carmelita Cortez, a coffee shop waitress at the El Cortez. "We're satisfied with it."

Terry Hatcher, a graveyard shift porter at the Plaza, called the contract a "reasonable one."

"Sometimes everybody has got to bend a little bit," he said. "I'm glad that the union and Jackie (Gaughan) found a way to work this out. He's been a great employer. He's always there when we need him."

Horseshoe bartender Bob Leonforte added: "I think it's a great, fair contract. Everything seems fine with me."

Chris Damian, an apprentice bartender at the El Cortez, said he also was happy with the agreement.

"We got everything we wanted," he said. "We didn't lose anything."