Aramark slashes 401(k) match after record profits
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Aramark informed managers that the company match on their 401(k) contributions will be cut in half, Philly.com reported Wednesday.
Why it matters: The strange part of the announcement to staff was that it came days after Aramark reported record sales and its highest profit margin ever. GAAP earnings per share rose 53% year over year, partly due to a $38 million benefit from the 2017 tax reform bill. (The record year did include layoffs of about 540 employees and $30-35 million in net severance charges.)
Details: They'll take the match to a maximum of 25% of 6% of pay. That's down from 50% last year and 65% in 2016. Aramark added that its bonuses would be paid two months late.
The big picture: Aramark has a long history of battles with this sort of issue. The company provides services that often replace government workers in schools, prisons and at healthcare facilities. That has put it in the middle of scandals over low pay and negligent practices.
- In 2008, Aramark settled a complaint with union workers after a three-day strike in which the National Labor Relations Board filed an unfair labor practice complaint and alleged intimidation and unfair firings.
- In 2012, an investigation found Aramark cut workers' pay and reduced their hours into unworkable split shifts, pushing them onto government assistance.
- Nine incidents of maggots were reported in Ohio prisons, including two in one week at a women's prison, where Aramark had taken over food prep operations.
- In 2015, Aramark reportedly was fined more than $270,000 for contract violations including not having enough workers to prepare and serve meals. A local news report found nearly 100 Aramark employees who were fired for inappropriate behavior.