At a time when companies are cutting back, a growing trend in states is consideration of laws mandating that companies spend a certain percent of payroll on healthcare.

In Maryland, the legislature passed such a law. The governor vetoed it. Today, the Maryland Senate voted to override the veto. The bill overriding the governor’s veto now goes to the Maryland House.

Under the law, firms with more than 10,000 employees would be required to spend at least eight percent of payroll cost on healthcare for employees, or give the government the difference.

Here are more details on the events.

When I read the comments, it appeared to me that the criticism and the bill were specific to Wal-Mart. Now, here is a related story that talks about some facts that suggest perhaps Wal-Mart should not be judged quite so harshly. It seems to me that providing healthcare to part-time employees is unusual and firms who do so should be given some consideration.

It is always scary when laws are passed to deal with issues involving one company. Sometimes, the cure in such situations leads to worse consequences than the “disease.”

If Company X were thinking of moving its headquarters to Maryland, would this bill deter the firm?

Will this law encourage large employers to spend less on compensation because that is a way to reduce their obligation to pay the state?

From a business perspective, would the proposed approach actually grow the economy, encourage businesses to go elsewhere, or simply encourage businesses to increase prices? Other thoughts?

Filed by Coleen Davis at 4:37 pm under Current Events