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Color-Tex withheld insurance payments
BY
SARA PITZER
SALISBURY POST
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The 350 employees who lost their jobs when Color-Tex International closed its doors and padlocked the gate Thursday have even more trouble. Some employees said they cannot cash their paychecks, drawn on F&M bank.
And, although they didn't know it, Color-Tex workers haven't had health insurance since July 31, even though the company has been deducting money for insurance from their paychecks. The
company's health insurance was with United Health Care of North Carolina, based in Greensboro.
United Health Care Director of Communications Roger Rollman said the insurance company contracts with employers, not individuals. The employer deducts money from the
workers' paychecks and pays the premiums for those covered.
Rollman said Color-Tex's insurance problems go back for at least the past year. "There has been more than one instance when payment was late or there was no
payment," he said. "Our finance people bent over backwards trying to work with the owners of this company to make it possible for them to continue to have health coverage for the employees. The last time it happened we told them if it happened again we would not be able to continue bending over backwards,
we'd have to terminate the insurance."
On Monday, according to Rollman, the account representative for Color-Tex said it had now been two months since Color-Tex paid its insurance premium. The representative reminded Rollman the insurance company would have to terminate the contract.
"We did, effective July 31,"Rollman said.
Officials of the United Food and Commercial Union, Local 440T, said this meant insurance claims filed by employees since July 31 would not be valid.
Local Union President Norman Beaver said Color-Tex never told employees they
didn't have insurance any more and continued to deduct money from their paychecks for it.
Rollman said United Health Care had advised Color-Tex in the past that if the time came when they would have to end the insurance, Color-Tex would have an obligation to send a letter to employees that the coverage is ending.
"It doesn't appear that they took our advice,"Rollman said. "This is one of the most regrettable things I can imagine happening to those employees, especially when somebody is taking their money.
"It's appalling. I am so sorry."
Beaver said Color-Tex management also failed to tell employees when and how to file for unemployment.
Lane Dyer, regional manager of the Employment Security Commission, said when a plant with more than 60 employees has to close, management is supposed to submit a WARN notice with the Division of Employment Training in the Department of Commerce in Raleigh, to give 60 days notice under normal circumstances.
But the flood of Color-Tex employees that showed up at the Rowan County Employment Security Office Friday morning took the staff there by surprise. Dyer, who used to manage the office, was just there visiting.
"They didn't give 60 minutes notice," he said.
Beginning Monday, Dyer will send staff from other offices to the Rowan County office to help handle the load quickly, he said.
Dyer explained that people filing a new claim become eligible for payment after waiting a week. They become eligible sooner if
they've been laid off before.
"As a general rule, a person collects 50 percent of gross wages up to a maximum $375 a week in North
Carolina," he said.
So a worker who makes $500 a week would receive $250 a week, taxable income.
Depending on how long they've been working, laid-off employees can draw unemployment for up to six months in a calendar year.
When it comes to issues of insurance, medical care and severance pay, Dyer said the union negotiates with the company.
Greg Chambers, international representative of the United Food and Commercial Union, said company officials have not returned phone calls so far and failed to live up to their promise to meet with the union Friday.
Union representatives will be at the union hall until noon today and every day next week, beginning at 8 a.m.
"We'll be here for our people for as long as it takes," he said.
According to Beaver and Chambers, Color-Tex has collected more than $31,000 in union dues for the past month, but the check to the union bounced because of insufficient funds in the Color-Tex bank account at F&M Bank. Chambers said union members have met their responsibilities in contributing toward insurance, dues and the 401K plan and Color-Tex has not.
"This is unreal," he said.
Chambers and Beaver said in addition to owing about $100,000 to United Health Care, Color-Tex owes a gas bill of $100,000. Some financial deadlines were Thursday, they said, and apparently the company could not meet them.
Spencer Town Manager Kevin Howard said the company still owes Spencer at least $10,000 for water service, assuming a $10,000 check the town received this week is good.
The Spencer site was supposed to become corporate headquarters for Color-Tex International. A group of investors led by David Risdon of Boston purchased Color-Tex International, which in turn acquired the assets of Color-Tex Finishing and Color-Tex West.
It is not clear whether Color-Tex plants at other sites also are closing. When the Post called Color-Tex International in Boston, the woman who answered the phone hung up when she heard the word
"newspaper."
Attempts to speak to company officials who gathered at a private party Friday night were unsuccessful.
Some employees who called the Post said the party was planned earlier as a welcome event for Risdon, the lead investor for the company. A reporter who attempted to speak to people at the gathering was asked to leave.
Staff writer Jill McCartney contributed to this report.
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