Pepsi Levies a Sin Tax on Its Workers

Four years ago, PepsiCo began rolling out a wellness program that charges its employees $50 a month if they smoke or have obesity-related medical problems such as diabetes, hypertension, and high blood pressure. Workers can avoid the surcharge if they attend classes to learn how to break their nicotine addictions or lose weight. When about 400 unionized PepsiCo bottlers and truck drivers in central New York learned early last year they’d be subject to the fee, they rebelled. It’s a “sin tax,” says Ozzie Martucci, secretary-treasurer of Teamsters Local 669 in Albany. “We’re against that type of tax, frankly. It feels wrong.”

The workers decided they wanted to withdraw as a group from Pepsi’s health plan, so Martucci began shopping for a new one. A dozen insurers were interested in the Teamsters’ business, but they wouldn’t provide quotes without seeing a history of employee health claims to get a sense of the costs they could expect. Martucci says Pepsi-Co failed to turn over everything the Teamsters requested, citing health-care privacy laws. “We have always been willing to provide the unions with as much information as possible,” says Dave DeCecco, a PepsiCo spokesman. Martucci filed a complaint with the National Labor Relations Board last fall alleging that the company violated its contract with the Teamsters. A spokesman for the NLRB says it’s trying to negotiate a settlement.