Twin River: IGT shrinks commitment to jobs

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PROVIDENCE — For better or worse, the legislation that would extend IGT's 20-year Rhode Island contract to run the Rhode Island Lottery for another two decades would give the company more leeway than it has now in how it counts full-time employees for purposes of meeting a critical minimum-employment requirement.

It appears it would also reduce the minimum-pay requirement in the company's current 2003-23 Lottery contract. 

Keeping the 1,000-plus IGT employees currently working in Rhode Island has been central to Raimondo's sales pitch for the no-bid contract extension she proposed to lawmakers in late June as the legislative session was winding down. Because of this unique employment requirement, advocates of the deal say it is not possible to compare the terms — including the extraordinary 20-year span — of the current and proposed new contract to any other Lottery contract in the country.

According to a letter from Marc Crisafulli, president of Twin River's Rhode Island casino operations, to lawmakers last week:

The legislation headed for potential legislative hearings this fall would allow IGT to count "self-employed" contractors towards the requirement, within the legislation, that it employ "the equivalent" of at least 1,100 full-time workers in Rhode Island. Crisafulli's reading: "They would no longer need to be employed by IGT."

As Crisafulli interprets the legislation, it would also drop the minimum pay requirements from 250% to 150% of the state's minimum wage, which currently stands at $10.50 an hour. Translated: the pay for a hypothetical 30-hour-a-week full-time employee at 150% of the minimum wage — or $15.75 an hour — would be $24,570 a year, and for a 40-hour-a-week employee, $32,760. (IGT says its employees actually average $100,000 a year.)

A key player in Twin River's attempt to grab a larger piece of Rhode Island's gambling business away from IGT, Crisafulli told the lawmakers: "They are significantly lowering their obligation in the new contract."

What does the legislation actually say? Going forward, it would require IGT to: "Employ, cause to be employed by an Affiliate or cause to be self-employed in the State during each calendar year commencing with 2019 at least 1,100 full time equivalent employees at compensation rates not less than 150% of the minimum wage in effect from time to time..."

By contrast, the state law referenced in IGT's current contract says, in part: "The term 'full-time equivalent active employee' means any employee who: (1) works a minimum of thirty (30) hours per week within the state; (2) earns healthcare insurance benefits, and retirement benefits; and (3) earns no less than two hundred fifty percent (250%) of the hourly minimum wage prescribed by Rhode Island law."

Asked why the Raimondo administration is seeking to change the minimum employment requirements stated in IGT's current 2003-2023 contract, top aides to the governor told The Journal late last week: The definition of a "full-time employee" in the proposed new contract would include only employees working 40 hours a week, not 30 hours.

This understanding is not reflected in the legislation that General Assembly leaders introduced for the governor in late June, but Raimondo spokesman Josh Block said Tuesday that the 40-hour requirement was reflected in a 2005 "economic development agreement" with the company (GTECH) that morphed into IGT.

He said the understanding that the company could count "affiliate" employees was also reflected in that 2005 agreement. He also disputed what the law cited in IGT's current Lottery contract says about minimum pay requirements.

"Once again," he said: "Twin River is skewing the facts to mislead the public about the proposal before the General Assembly. The current proposal includes the same minimum wage standard (150%) as the 2003 Master Contract. It includes a stronger FTE requirement (1,100 instead of 1,000). And it includes a stronger hourly requirement (40 hours instead of 30 hours). Language regarding contracted employees was not included in IGT’s 2003 Master Contract but was included in their 2005 economic development agreement. The current proposal includes language consistent with that agreement, counting only “affiliate” employees rather than all contractors."

Added IGT Chairman Robert Vincent: "The letter from Twin River underscores the need for legislative hearings. It’s a flawed analysis. The bottom line is that we have over 1,000 ... high paying jobs that have an annual payroll over $100 million. Those are the facts.

"We look forward to having an opportunity to address these and other matters with the General Assembly through its committee process ... We are confident that process will expose this for what it is — a baseless attempt to divert attention from the significant positive impact IGT jobs have on the Rhode Island economy."