Blue Bottle Publicly Defending Some Cuts to Part-Timer Benefits

Blue Bottle Coffee photo

Blue Bottle Coffee is publicly defending its decision to cut health insurance benefits to some of its existing part-time employees as part of a company-wide benefits program reshuffling for 2015.

“Friends, there are a couple of stories floating around out there about some changes to our benefits structure within the company,” Blue Bottle wrote on its company blog today.

The “couple of stories” is actually a single story from the Silicon Valley gossip blog Valleywag, powered by Gawker Media, which put out a story last night citing an anonymous tipster who said the following:

tech-SF’s well-funded and successful favorite coffee shop, blue bottle, is informing all part-time employees today that they are losing their health benefits, effective january 2015. happy thanksgiving!

Valleywag noted Blue Bottle’s raising of more than $45 million through private investments over the past two years, suggesting the cutting of benefits to part-timers is hard to reconcile considering the massive cash influx and subsequent retail developments.

To its credit, Blue Bottle has responded with some level of transparency, acknowledging that health benefits have indeed been cut to employees working less than 28 hours per week. The company says only approximately 22 percent (19) of its 84 qualifying part-time employees initially signed up for an insurance plan, and those are the ones affected. For more of their side of the story, here’s the remainder of Blue Bottle’s response:

Here are some details we wanted to share.

Earlier this year, Blue Bottle’s People Operations Department conducted its first all-company survey to determine what benefits were of highest priority to our employees — from execs to baristas to roasters to production crew.

The top two responses we got:

I. Dependent health coverage (which we’re launching now. For all full-time employees, Blue Bottle is now covering 80 percent of dependents’ health costs. This means spouses, significant others, children, etc. We were not able to do this before, and we’re thrilled that we finally figured out a way to swing it.

II. Retirement benefits (which we’re launching early next year)
We’re still hashing out the details of this, but there will be more to report in early 2015.

In order to accommodate these changes, we did indeed have to re-organize our benefits structure. And yes, this means that some part-time employees no longer qualify for coverage under Blue Bottle.

Here’s a bit more about that:

The change affects employees who work less than 28 hours per week. There are 84 of these employees. But from that 84, only 19 had ever opted into an insurance plan with us when they were hired. So at this time, 19 of around 340 folks are affected — a total of six percent.
Here are some actions we’re taking immediately to accommodate this six percent:

Our People Ops folks have reached out individually to each of these people to schedule appointments where they’ll guide them through Covered California plans (and similar ones in NY). In many cases, these are comparably priced to what our employees were paying with us.

If any employee wants to increase his/her hours to qualify (i.e. work more than 28), we’re making accommodations among different cafes, and with retail managers, to find a place for them to pick up an extra shift or two. From there, they qualify as usual.

Our People Ops department is hosting several info sessions, as well as assigning one member of each coast’s team to be available by phone or Google Hangout for any questions as they arise.

We’d obviously prefer to not shuffle anything around. And thanks to these benefits increases, we’re actually projecting to spend close to 50 percent more on employee benefits in 2015 than we did in 2014.

But given a big increase in premiums we’re paying to insurance companies this year (between 12-13 percent since last year), and given the new benefits that our company as a whole asked for, we decided this was the best decision.