The ultimate work perk? This company provides a free place to stay in Spain

Some workers go to great lengths to hide hush trips from their bosses.

But employees of the Polish company PhotoAid needn’t bother.

The company, which helps travelers take their own passport photos at home, allows its employees to stay at an apartment in Spain for free — provided they work while they’re there.

The apartment is in Tenerife, the largest of Spain’s Canary Islands, an archipelago west of Morocco. Employees can stay up to three weeks at a time and can visit as many times in year as they like, depending on demand from other employees.

The company reimburses half of employees’ airfare too, up to 1,000 Polish zlotys ($246), once a year. Flights from Warsaw to Tenerife can start at around $150 for a six-hour direct flight.

Employees can stay up to three weeks at a time at the Tenerife apartment and can visit as many times as they like.

Source: PhotoAid

The company started renting the apartment in Tenerife’s capital, Santa Cruz de Tenerife, in the summer of 2022 as a way to create relationships and build morale among its employees, all of whom work remotely, said co-founder Rafal Mlodzki.

Plus, Mlodzki said he and the other co-founders, Marcin and Tomasz Mlodzki — who are also his brothers — wanted to offer a company perk that would stand out.  

How the ‘workcations’ work

PhotoAid is a small company with a young workforce, so most employees don’t have children, said Mlodzki. But those who do tend to group together and use the benefit in the summer months when schools are closed.

Employees can request to bring their partners too, which the company reviews on a case-by-case basis, he said.  

Employees must abide by several rules, he said, such as the check-in and check-out protocol. Employees must upload a photo of the apartment on arrival, then do the same on departure to show the next group of employees how they left it.

Workcation time spent in Tenerife doesn’t count as employee vacation time, which is up to 26 days a year, said PhotoAid co-founder Rafal Mlodzki.

Source: PhotoAid

On arrival, employees are assigned a cleaning task too, but the company hires a professional cleaner for deep cleans, he said. While drinking wine on the balcony and chatting into the night are regular occurrences, employees are not allowed to drink during work hours, he said.   

Mlodzki told CNBC Travel that employees like to visit Tenerife with coworkers with shared interests. For example, a recent group played sports in their free time, while another group went to music concerts.

‘The best onboarding in the world’

Around 50 of PhotoAid’s 143 employees have now stayed at the Tenerife apartment, many meeting their teammates in person for the first time during their stays. Around 10 were onboarded as new starters there too, said Mlodzki.

“One of the reasons we decided to open this office was the possibility of offering the best onboarding in the world for senior team members. Those onboarded are not only thrilled but also deeply understand the company and their role in it,” said Mlodzki.

Coworkers with shared interests — such as sports and music — travel to Tenerife together.

Source: PhotoAid

“Often, spontaneous moments occur. For example, after a series of 45-minute sets with 10-minute breaks, we might go on a mini mountain trip and continue onboarding informally. It might even transition into an evening on the terrace.

“We just onboarded our new chief operating officer during a workation in Tenerife, and he was deeply impressed. He had never experienced an onboarding like this before.”

Two senior leaders have scheduled a strategic planning and brainstorming session at the apartment this winter, where average temperatures in January are 68 degrees Fahrenheit, higher than 34 F in the Polish capital of Warsaw.

The apartment

The 3,200-square-foot apartment overlooks the port of Santa Cruz de Tenerife. It has three bedrooms, a spacious lounge with board games, two balconies and a small gym. There are also eight workspaces with high-speed internet, computer monitors and ergonomic chairs.

The apartment has eight workspaces with high-speed internet, computer monitors and ergonomic chairs.

Source: PhotoAid

There’s a bakery next door for fresh bread, with restaurants, bars, wineries, and vermuterias (bars specializing in Spanish vermouth) nearby.

Workation as a ‘wow’ factor

When she was interviewing, Aleksandra Staromiejska said the Tenerife benefit made PhotoAid stand out. Now a company digital public relations specialist, she stayed in the apartment for two weeks in May, along with a colleague from her team. 

Aleksandra Staromiejska started her work days early to maximize her time at the beach, she said.

Source: Aleksandra Staromiejska

She started and finished her work early, she said, to spend as much time as possible at the beach, a 20-minute bus ride away. Over the weekend, she and her colleague went hiking in Macizo de Anaga (Anaga mountains).

“I noticed my productivity levels were higher,” said Staromiejska. “I really wanted to do my job quickly so I could finish my work day and have time to go to the beach.”

Vacations to Spain’s Canary Islands are popular with employees of PhotoAid, a company based in the much colder city of Warsaw, Poland.

Source: PhotoAid

“It was actually a very relaxing trip. Just being in nature is something else. My batteries were just charged up,” she said.

The Spanish apartment is often mentioned in employee satisfaction surveys, said Mlodzki.

“When we recruit, it’s an attractive benefit that candidates always react positively to.”

A vacay with the boss?

Enamored by the culture and scenery, Mlodzki said he spends half his time in Warsaw and half his time in Tenerife, staying in the master bedroom at PhotoAid’s apartment. 

Mlodzki acknowledged that some people might feel nervous about spending so much time with their boss. (Indeed, Staromiejska admitted she did before her workation.) But he said it’s great for rapport.

“It’s super interesting for me to get to know more people. To give and get feedback is very enriching for me,” he said.

Rafal Mlodzki, Aleksandra Staromiejska and Michel Jonca. “It’s super interesting for me to get to know more people,” said co-founder Mlodzki.

Source: PhotoAid

From leasing the apartment to paying for employees’ flights, Mlodzki said the investment has been worth it.

 “We think about the Tenerife office as the ‘company charger’ with the goal of reenergizing employees and boosting team spirits that can get depleted by remote work.”

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It’s open enrollment season for health coverage. If you’re self-employed, you can’t afford to ignore it

Open enrollment season can be a time of trepidation for the self-employed

The stakes are especially high because if you need to buy individual or family coverage, the next few weeks could be your only chance for 2024, barring certain exceptions such as moving to a different state, getting married, divorced or having a child. 

“For most people, the nationwide open enrollment period for individual and family coverage is your best shot to review your options and enroll in a new plan,” explained Anthony Lopez, vice president of individual and family and small business plans at eHealth, a private online marketplace for health insurance, in an email.

More from Year-End Planning

Here’s a look at more coverage on what to do finance-wise as the end of the year approaches:

Picking health insurance on your own — without the help of a human resources department — can be daunting. Instead of throwing up your hands in frustration, here are answers to questions self-employed individuals often have about open enrollment.

Healthcare.gov and other options for information

Freelancers, consultants, independent contractors and other self-employed individuals can visit www.healthcare.gov to research and enroll in flexible, high-quality health coverage, either through the federal government or their state, depending on where they live. You can also choose to work directly with an insurance agent or with a private online marketplace to help you wade through options. To be considered self-employed, you can’t have anyone working for you. If you have even one employee, you may be able to use the SHOP Marketplace for small businesses

The deadlines you need to stay on top of

Most states set a deadline of Dec. 15 for coverage that begins Jan. 1, so don’t delay when it comes to signing up for benefits, said Alexa Irish, co-chief executive of Catch, which helps self-employed individuals choose health-care plans. Also, remember to pay your first month’s premium before your health care is supposed to start or you’ll be out of luck as well. “If you miss those deadlines, there’s no wiggle room,” said Laura Speyer, co-CEO of Catch.

If you are already enrolled in a marketplace plan

Those who were already enrolled in a plan last year can make changes by Dec. 15 for coverage that begins Jan. 1. Doing nothing will mean they are automatically reenrolled in last year’s marketplace plan. 

Qualifying for tax credits and other savings

Many people assume they won’t be entitled to savings, but they should still investigate their options, Irish said. Indeed, 91% of total marketplace enrollees received an advance premium tax credit in February 2023, which lowers their monthly health insurance payment, according to data from the Centers for Medicare & Medicaid Services, a federal agency within the U.S. Department of Health and Human Services.

Credits and other eligible savings are available based on an applicant’s income and household size and can be estimated even before they officially apply. It’s advisable to check for savings possibilities every year, Irish said.

What to consider in making coverage decisions

The thought process will be similar to what you went through when picking health insurance offered by an employer. Whether you are signing up for the first time — or deciding whether to renew your existing plan or choose a different one — you’ll want to consider factors such as who in the family needs the coverage and for what purposes, and how different plans compare in terms of coverage options and cost. This analysis needs to take into account copays, prescription drugs you take or may start to take, whether the plan covers your doctors, and out-of-pocket maximums. 

If you’re self-employed and aiming to grow your business in the coming year, possibly by hiring employees, it’s good to know you can enroll in a small business plan at any time of the year, Lopez said. “Small business group plans aren’t governed by the same open enrollment rules as individual and family plans. So, you can enroll in an individual plan today, then switch over to a group plan in mid-2024 if you add a couple employees and want to provide them with health benefits,” he said.

How much health insurance costs the self-employed

Cost will vary, depending on the plan you choose, who is covered and what subsidies you’re eligible for. But, as a general guide, the average total monthly premium before tax subsidies in February 2023 was $604.78. The average total premium per month paid by consumers after the tax subsidies was $123.69, according to the Centers for Medicare & Medicaid Services.

Self-employed individuals may also be eligible for a cost-sharing reduction, a discount that lowers the amount paid for deductibles, copayments and coinsurance. You’ll find out what you qualify for when you fill out a marketplace application, but keep in mind, you need to enroll in a “Silver” plan, one of four categories of marketplace plans, to get the cost-sharing reduction. 

Wading through policy options, working with an agent

You don’t have to go through the process alone. There are assisters who are trained and certified by marketplaces to help you apply and enroll. If you want more specific help, you can also choose to work with an agent or broker who is trained and certified to sell marketplace health plans in the state they are licensed. Agents can advise you and give you more detailed information about the plans they sell, and since health insurance premiums are regulated by your state’s Department of Insurance, you don’t have to worry about paying more by working with an agent.

A few things to note: Some agents may offer other plans that aren’t available on government exchanges, but that comply with government requirements. However, to take advantage of a premium tax credit and other savings, you must enroll for a plan through a state or federal marketplace, on your own or through an agent. 

The risk and reward of high-deductible plans

Marketplaces offer multiple plans to choose from and they will vary in terms of coverage and price. One option that’s becoming more popular, especially with young entrepreneurs, is called a high-deductible health insurance plan. This type of insurance plan comes with higher deductibles in exchange for lower premiums, which could be a good choice for people who are healthy and don’t visit the doctor much. Another benefit of a qualified high-deductible plan is the ability to contribute to a tax-advantaged savings vehicle known as a health savings account, or HSA. 

When deciding whether to choose a high-deductible plan, individuals should take into account factors such as how often they visit the doctor, how much they can afford to pay out of pocket, whether their doctors are in network and what the out-of-pocket maximums are. It’s also important to know you have the means to cover a high-cost medical event, should the need arise. If a high-deductible plan makes sense for your circumstances, you can then consider an HSA.

Lopez recommends people don’t delay when it comes to reviewing their coverage options, which may also include dental and vision insurance. “The last week or so of open enrollment can be a busy time for licensed agents too; if you want the best chance of talking to an agent to get your personal questions answered, don’t put it off.”

Don’t miss these stories from CNBC PRO:

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UAW strike brings blue-collar vs. billionaire battle to Detroit

DETROIT — The United Auto Workers strike is bringing a blue-collar versus billionaire battle to the Motor City, just as UAW President Shawn Fain wanted.

The outspoken union leader has weaponized striking — historically a last resort for the union — after less than 24 hours into a work stoppage arguably better than any UAW president has in modern times.

It wasn’t by accident.

Fain, a quirky yet emboldened leader, has meticulously brought the UAW back into the national spotlight after decades of near irrelevance. He wants to represent not just union members but also America’s embattled middle class, which UAW helped create.

United Auto Workers union President Shawn Fain joins UAW members who are on a strike, on the picket line at the Ford Michigan Assembly Plant in Wayne, Michigan, September 15, 2023.

Rebecca Cook | Reuters

To do so, he has leveraged a yearslong national labor movement and a growing disgust for wealthy individuals and corporations among many Americans — starting with his first time addressing the union’s more than 400,000 members during his inauguration speech in March.

“We’re here to come together to ready ourselves for the war against our only one and only true enemy, multibillion-dollar corporations and employers who refuse to give our members their fair share,” Fain said at the time. “It’s a new day in the UAW.”

Fain’s comments Friday morning as he joined UAW members and supporters picketing outside a Ford plant in Michigan — one of three facilities the company is currently striking — echoed everything he said during that first speech.

“We got to do what we got to do to get our share of economic and social justice in this strike,” Fain said outside the Ford Bronco SUV and Ranger pickup plant. “We’re going to be out here until we get our share of economic justice. And it doesn’t matter how long it takes.”

Fain’s upbringing plays into his strong unionism and religious beliefs, which he has growingly talked about with members as he emphasizes “faith” in the UAW’s cause. Two of his grandparents were UAW GM retirees, and one grandfather started at Chrysler in 1937, the year the workers joined the union. Fain, who joined the UAW in 1994, even keeps one of his grandfather’s pay stubs in his wallet as “a reminder” of where he came from. 

National media and others really started paying attention to Fain when he said the union would withhold a reelection endorsement of President Joe Biden, who has called himself the “most pro-union president in history.” Fain and Biden have spoken and met, but the union leader has not shown much support for the president. In response to comments by the president Friday, Fain said: “Working people are not afraid. You know who’s afraid? The corporate media is afraid. The White House is afraid. The companies are afraid.”

While many past union leaders have talked such talk, Fain has thus far delivered on his promises to members without batting an eye — causing General Motors, Ford Motor and Stellantis to go into crisis mode this week as the UAW follows through on that promise to members.

“We’ve never seen anything like this; it’s frustrating,” Ford CEO Jim Farley told CNBC’s Phil LeBeau Thursday as he criticized Fain and the union for what he said was a lack of communication and counteroffers. “I don’t know what Shawn Fain is doing, but he’s not negotiating this contract with us, as it expires.”

In a statement Friday, Ford said that the UAW’s partial strike at its Michigan Assembly Plant has forced it to lay off about 600 workers.

“This is not a lockout,” Ford said. “This layoff is a consequence of the strike at Michigan Assembly Plant’s final assembly and paint departments, because the components built by these 600 employees use materials that must be e-coated for protection. E-coating is completed in the paint department, which is on strike.”

GM CEO Mary Barra echoed Farley’s feelings Friday morning on CNBC’s “Squawk Box.”

“I’m extremely frustrated and disappointed,” she said. “We don’t need to be on strike right now.”

Both CEOs said everything they could to indicate they believe Fain may not be bargaining in good faith without using those exact words, which could justify a complaint with the National Labor Relations Board.

The UAW in late August filed unfair labor practice charges against GM and Stellantis with the NLRB, alleging they did not bargain with the union in good faith or a timely manner. It did not file a complaint against Ford. GM and Stellantis have denied those allegations.

Ford CEO Jim Farley: No way we would be sustainable as a company with UAW's wage proposal

Several past union leaders and company bargainers who spoke to CNBC hailed the way Fain has been able to propel the UAW into the national spotlight, including pausing bargaining for a Friday rally and march with Sen. Bernie Sanders, the progressive lawmaker from Vermont. Sanders, whose surprise 2016 Democratic presidential primary win in Michigan helped cement his national prominence, has lent support to numerous labor movements around the country as he rails against the billionaire class.

“I think they’re just doing an outstanding job,” said respected former UAW President Bob King, who cited growing support for the union among the public and the union’s own members. “Both those measurements say that UAW communications has been outstanding.”

UAW members have taken notice — especially after many of them disdained union leadership during and after a yearslong federal corruption investigation that landed two past UAW presidents and more than a dozen others in prison.

“For all the years that I’ve worked here, it’s never been this strong,” said Anthony Dobbins, a 27-year autoworker, early Friday morning while picketing the Ford plant in Michigan. “This is going to make history right here because we are trying to get what we deserve.”

Dobbins, a UAW Local 600 union representative, balked at current record offers by the automakers that have included roughly 20% pay increases, thousands of dollars in bonuses, retention of the union’s platinum health care and other sweetened benefits.

“That’s not working for us. Give us what we asked for,” Dobbins said. “That’s what we want. We have to work seven days, overtime, just to make ends meet.”

United Auto Workers President Shawn Fain, center, poses with Anthony Dobbins, right, a 27-year autoworker, and others as the union pickets a Ford plant in Wayne, Michigan, Sept. 15, 2023.

Michael Wayland / CNBC

Key demands from the union have included 40% hourly pay increases; a reduced, 32-hour, workweek; a shift back to traditional pensions; the elimination of compensation tiers; and a restoration of cost-of-living adjustments. Other items on the table include enhanced retiree benefits and better vacation and family leave benefits.

Automakers have argued such demands would cripple the companies. Farley even said the company would have “gone bankrupt by now” under the union’s current proposals and members would not have benefited from $75,000 in average profit-sharing over the last decade.

Ford sources said the automaker would have lost $14.4 billion over the last four years if the current demands had been in effect, instead of recording nearly $30 billion in profits.

Such profits are exactly what Fain has said UAW members deserve to share in. But his strategy to get workers a larger piece of the pie carries great risks.

“This is not going to be positive from an industry perspective or for GM,” Barra said Friday.

Many outside the union believe if Fain pushes too hard, it could lead to long-term job losses for the union. A former high-ranking bargainer for one of the automakers told CNBC that it’s nearly guaranteed the companies cut union jobs through product allocation, plant closures or other means to offset increased labor costs.

“They’re going to have to pay up. The question is how much,” said the longtime bargainer, who agreed to speak on the condition of anonymity. “This ends up with fewer jobs. That’s how the automakers cut costs.”

Fain and other union leaders have argued that meeting the companies in the middle has led to dozens of plant closures, fewer union members and a growing divide between blue-collar workers and the wealthy.

So why not fight?

“This is about us doing what we got to do to take care of the working class,” Fain said Friday. “This isn’t just about the UAW. This is about working people everywhere in this country. No matter what you do for a living, you deserve your fair share of equity.”

GM CEO Mary Barra on UAW strike: We put a historic offer on the table

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Why auto worker strikes against GM, Ford and Stellantis seem inevitable

Members of the United Auto Workers union hold a rally and practice picket near a Stellantis plant in Detroit, Aug. 23, 2023.

Michael Wayland / CNBC

DETROIT – United Auto Workers President Shawn Fain appears ready to fire up the picket lines.

The union’s bulldog new leader has repeatedly vowed to drive a hard bargain with Detroit automakers General Motors, Ford Motor and Stellantis in contract negotiations ahead of an expiration at 11:59 p.m. on Sept 14.

He’s maintained it’s a hard deadline that his leadership team does not plan to extend, like the union has in the past, and that he’s not afraid to take roughly 150,000 auto workers out of factories if necessary.

That — plus the revelation late Thursday that Fain and the union filed unfair labor practice charges against GM and Stellantis with the National Labor Relations Board, claiming the companies weren’t bargaining in good faith — makes a strike against one, if not all three of the automakers, increasingly inevitable.

Unlike prior union leaders, Fain is attempting to negotiate with all three automakers at once, refusing to select a “target” company to focus on while extending deals at the others. He’s also been far more confrontational with the automakers compared to previous union leaders, at times launching personal attacks on executives.

There’s a belief among some industry analysts and experts that a strike, or several, may be necessary to convince UAW members that the union leaders fought as hard as they could to reach the demands.

“I expect there to be a strike,” said Art Wheaton, a labor professor at the Worker Institute at Cornell University. “I think there’s a reasonable chance they strike Stellantis first and then give a couple more days for Ford and GM to give a better offer.”

Wheaton believes that a strike at Stellantis is nearly guaranteed with the sides as far apart as they are now. The union could use that work stoppage as a warning to GM and Ford to finalize their deals, he said.

“I think a strike is almost essential at Stellantis or they will never get a deal ratified,” Wheaton said. “Stellantis is picking a fight, saying, ‘Try me if you dare.'”

Strikes could take various forms, including a national strike, where all workers under the contract cease working, or targeted work stoppages at certain plants over local contract issues.

During a Facebook Live on Aug. 8, 2023, UAW President Shawn Fain

Screenshot

Prolonged strikes against all three of the automakers would be unprecedented and quickly impact the automotive supply chain, U.S. economy and domestic production.

The Biden administration has taken particular interest in the talks, including the appointment of longtime Democratic adviser Gene Sperling to monitor the situation for the White House.

Wall Street watching

Wall Street has warned of a potential work stoppage for several months, and investors have taken heed.

A brief survey of 99 investors by Morgan Stanley found 58% believe a strike is “extremely likely.” That’s followed by 24% who said it’s “somewhat likely.” Just 16% said a strike was unlikely, while 2% said it was “neither likely not unlikely.”

Industry and labor experts agree, and for good reason.

The impending contract deadline follows combative rhetoric by Fain and other union leaders; a years-long labor movement involving work stoppages, including the UAW; and ambitious demands by the union for 40% or more pay increases, retention of platinum healthcare and a 32-hour workweek.

Such demands aren’t typically made public or even fully reported until close to the end of the negotiations, in part as an effort to bargain in good faith but also to avoid setting expectations — either too high or too low — for UAW members, who need to ratify the contracts after the sides announce a tentative agreement.

“I’ve always said that the best way to reach agreements is to be negotiating with each other and not in the newspapers, TV or anywhere else,” said Dennis Devaney, senior counsel at Clark Hill who formerly served as a NLRB board member and attorney for GM and Ford. “I don’t think the public negotiation … is really going to move things along.”

United Auto Workers members on strike picket outside General Motors’ Detroit-Hamtramck Assembly plant on Sept. 25, 2019 in Detroit.

Michael Wayland / CNBC

o be clear, it’s not exclusively up to Fain to call for strikes. It’s up to the UAW’s 14-member International Executive Board (IEB), which Fain leads as president. The leaders, based on weighted votes, must approve such a work stoppage by a two-thirds majority vote.

Then there’s the question of how long a strike would last.

Of its surveyed investors, Morgan Stanley found the vast majority of respondents (96%) expected a potential strike to last longer than a week. Over a third (34%) expect the strike to last longer than a month.

A strike against GM in 2019 during the last round of contract negotiations lasted 40 days and cost the automaker $3.6 billion in earnings that year, GM reported at the time.

The UAW has more than $825 million in its strike fund, which it uses to pay eligible members who are on strike. The strike pay is $500 per week for each member.

Assuming 150,000 or so UAW members covered by the contracts, strike pay would cost the union about $75 million per week. A fund of $825 million, then, would cover about 11 weeks. One caveat: that doesn’t include health-care costs that the union would cover, such as temporary COBRA plans, that would likely drain the fund far more quickly.

Ratification

For much of the union’s history, it was largely expected that members would ultimately approve whatever deal was bargained and endorsed by UAW leaders.

However, in recent negotiations, that hasn’t been the case and the sides have needed to return to the negotiating table.

That was the situation two rounds of negotiations ago, in 2015, with then-Fiat Chrysler, now Stellantis, workers, who voted down a tentative agreement. That same year, GM skilled trade workers also voted against a tentative deal with the Detroit automaker, stalling ratification.

Typically, once a tentative deal is reached between the union and an automaker, the members of that automaker will then vote by local organization on whether to accept the tentative agreement and make it a contract. The whole ratification process can take about two weeks for each company.

“The UAW’s tentative agreement with an automaker is really a set of agreements—the main text, as well as appendixes for different aspects, such as pensions and retirement plans, health care benefits, supplemental unemployment benefits, profit sharing, personal savings plans, life and disability benefits, dependent care benefits, and salaried workers (for those who are also UAW-represented),” said Kristin Dziczek, automotive policy advisor for the Federal Reserve Bank of Chicago’s Detroit branch, in a blog post.

In 2019, it took eight additional weeks to negotiate and ratify all three agreements once the first tentative agreement was reached following GM’s strike. The negotiations and ratification voting ended in early December.

Spokespeople for the automakers declined to comment directly for this article, but reiterated that their teams continue to bargain in good faith with the union in hopes of deals that benefit both sides.

– CNBC’s Michael Bloom contributed to this report.

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What Wall Street needs to know about UAW talks, a potential strike, and what it could all cost

United Auto Workers members on strike picket outside General Motors’ Detroit-Hamtramck Assembly plant in Detroit, Sept. 25, 2019.

Michael Wayland / CNBC

DETROIT – The Oracle of Omaha is cutting exposure to the U.S. automotive industry amid union negotiations — potentially for good reason.

Warren Buffett’s Berkshire Hathaway this week said it nearly halved its stake in General Motors in the second quarter. While the firm didn’t disclose its reasoning, the sale front runs what is expected to be a challenging end of the year for the U.S. automotive industry, plagued by contentious contract talks between the United Auto Workers union and GM, Ford Motor and Stellantis.

The talks, which cover nearly 150,000 U.S. auto workers, could cost the automakers billions of dollars in additional labor costs, work stoppages or, in a worst-case scenario, both.

New UAW leadership team has dubbed these talks the union’s “defining moment.” President Shawn Fain has already deployed harsh messaging and a few theatrics, including throwing contract proposals by Stellantis in a trash bin, and there’s been little to no talk about “give and take” or “win-win” deals.

“They’re ready to strike if a deal does not happen,” said Melissa Atkins, a labor and employment partner at Obermayer. “Going in with that mindset, I anticipate it being very contentious … and just given the history, there probably will be a strike.”

Aggressive efforts by the union are great for organized labor and the embattled UAW, which is attempting to regain its footing after a yearslong federal corruption probe landed several top leaders in prison for bribery, embezzlement and other crimes — but not for the companies or their shareholders.

Here are the numbers investors should know ahead of the expiration date for current contracts between the Detroit automakers and UAW at 11:59 p.m. ET on Sept. 14.

$80 billion

Contract proposals made by the UAW at this point would add more than $80 billion in labor costs for each of the biggest U.S. automakers over the length of the contract, Bloomberg News first reported earlier this month.

“One might think of these UAW contracts as a set of three large purchase orders to secure the labor needed to assemble future vehicles, parts, and components—contracts that are collectively worth roughly $70–$80 billion over the course of the next four years,” Kristin Dziczek, automotive policy advisor for the Federal Reserve Bank of Chicago’s Detroit branch, wrote in a Wednesday blog post.

United Auto Workers President Shawn Fain greets workers at the Stellantis Sterling Heights Assembly Plant, to mark the beginning of contract negotiations in Sterling Heights, Michigan, U.S. July 12, 2023. 

Rebecca Cook | Reuters

The demands include a 46% wage increase, restoration of traditional pensions, cost-of-living increases, reducing the work week to 32 hours from 40 and increasing retiree benefits.

If the UAW gets those demands, without any changes to other benefits, the all-in hourly labor cost for the automakers would more than double from at least $64 per hour to more than $150 per hour, according to media reports.

That would be a significant increase over wage hikes seen during the previous four-year agreements, according to estimates from the Center for Automotive Research. The 2019 deals were projected to increase average hourly labor costs over the length of the contracts by $11 per worker for then-Fiat Chrysler, now Stellantis, and $8 per worker at GM and Ford.

Under the current pay structure, UAW members start at about $18 an hour and have a “grow-in” period of four years to reach a top wage of more than $30 an hour.

$5 billion

A work stoppage by nearly 150,000 UAW workers at GM, Ford and Stellantis would result in an economic loss of more than $5 billion after 10 days, according to Anderson Economic Group, a Michigan-based consulting firm that closely tracks such events.

AEG estimates the total economic loss by calculating potential losses to UAW workers, the manufacturers and to the auto industry more broadly if the sides cannot reach tentative agreements before the current contracts expire.

In another analysis, Deutsche Bank previously estimated that a strike would hit earnings at each affected automaker by about $400 million to $500 million per week of production.

Strikes could take several forms: a national strike, where all workers under the contract cease working, or targeted work stoppages at certain plants over local contract issues. A strike against all three automakers, as Fain has alluded to, would be the most impactful but also the riskiest and most costly for the union.

$825 million

The UAW has more than $825 million in its strike fund, which it uses to pay eligible members who are on strike. The strike pay is $500 per week for each member – up from $275 in 2022.

Speaking in front of a backdrop of American-made vehicles and a UAW sign, President Joe Biden, then a presidential candidate, speaks about new proposals to protect U.S. jobs during a campaign stop in Warren, Michigan, Sept. 9, 2020.

Leah Millis | Reuters

1.5 million

If the union decides to strike against all three Detroit automakers, production losses would quickly add up.

S&P Global Mobility estimates a 10-week strike would mean lost production of roughly 1.5 million units, according to an investor note from Mizuho Securities USA.

A 40-day strike against GM during the last round of negotiations in 2019 led to a production loss of 300,000 vehicles, the company said then. It also cost the automaker $3.6 billion in earnings, GM said.

Industry experts argue that a strike against all or any of the automakers would likely impact the operations and bottom lines of the companies more quickly than four years ago since the U.S. auto industry is still recovering from supply chain problems caused during the coronavirus pandemic.

Vehicle inventory levels for the automakers also are lower than they were heading into the talks four years ago.

Heading into 2019 contract negotiations, U.S. vehicle supply was 3.73 million — essentially enough units to last 86 days of selling under normal conditions at the time, according to Cox Automotive. The industry is currently just under 2 million units, with 56 days’ supply.

“In 2019, there was quite a slack in there. There’s almost no slack now,” AEG CEO Patrick Anderson said Thursday during a webinar with the Automotive Press Association. “If we are to get a strike, within the first week, the numbers start to get serious for each of the automakers.”

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Why Amazon built a second headquarters and how the pandemic reshaped HQ2

Six years ago, Amazon kicked off a sweepstakes-style contest in search of where to build a second headquarters. The competition drew bids from 238 states, provinces and cities vying to be the next anchor for the nation’s dominant online retailer and second-largest private employer.

This week, Amazon formally opened the doors of the first part of its new East Coast headquarters, dubbed HQ2, in northern Virginia. The first phase, called Metropolitan Park, includes two 22-story office towers, which can accommodate 14,000 of the 25,000 employees Amazon plans to bring on in Arlington. About 2,900 employees have already moved in, and Met Park will be occupied by 8,000 employees in the fall.

Amazon built its headquarters in Seattle in 1994 partly because of the area’s deep pool of tech talent and the presence of Microsoft in nearby Redmond, Washington. The company’s Seattle campus now spans tens of millions of square feet across more than 40 office buildings, and the greater Puget Sound area has 65,000 corporate and technical Amazon employees.

It raises the question why Amazon, with its sprawling campus in Seattle and a growing real estate footprint globally, needed to build a second headquarters.

Around 2005, as Amazon’s business grew and its campus ballooned in Seattle, founder and then-CEO Jeff Bezos began to consider where the company should expand next.

At all-hands meetings, employees would ask Bezos “if we would ever be in one location at one time,” said John Schoettler, Amazon’s real estate chief, in an interview.

“I think that there was a romantic notion that we as a company would only be so big that we’d all fit inside one building,” Schoettler said. “[Bezos] had said, well, we have long-term leases and when those leases come up, I’ll work with John and the real estate team and we’ll figure out what to do next.”

John Schoettler, Amazon’s vice president of global real estate and facilities, walks Virginia Gov. Glenn Youngkin through HQ2.

Tasha Dooley

Originally, Bezos suggested Amazon stay around the Puget Sound area, but the conversation then shifted to recreating the “neighborhood” feel of its Seattle campus elsewhere, Schoettler said.

“We could have gone out to the suburbs and we could have taken some farmland and knocked some trees down, and we would’ve built a campus that would have been very inward-looking,” he said. “They generally have a north or south entrance and exit east or west. When you put yourself in the middle of the urban fabric and create a walkable neighborhood, an 18-hour district, you become very outward, and you become very part of the community, and that’s what we wanted.”

Holly Sullivan, Amazon’s vice president of economic development, said it would have been harder for Amazon to create that kind of environment had it “sprinkled these employees around 15 other tech hubs or 17 other tech hubs around North America.”

“So what HQ2 has provided is the opportunity for that more in-depth collaboration and being part of a neighborhood,” Sullivan said.

‘I don’t see us getting bigger in Seattle whatsoever’

Amazon’s highly publicized search for a second headquarters has faced some challenges. In 2018, Amazon announced it would split HQ2 between New York’s Long Island City neighborhood, and the Crystal City area of Arlington, Virginia. But after public and political outcry, Amazon canceled its plans to build a corporate campus in Long Island City.

The company’s arrival in Arlington has generated concerns of rising housing costs and displacement. The company said it has committed more than $1 billion to build and preserve affordable homes in the region.

Schoettler said Amazon intends to focus much of its future growth in Arlington and in Nashville, Tennessee, where the company’s logistics hub is based. It also plans to hire as many as 12,000 people in the Seattle suburb of Bellevue, he added.

“I don’t see us getting bigger in Seattle whatsoever,” Schoettler said. “I think that we’re pretty much tapped out there.”

HQ2 has some of the same quirks as Amazon’s Seattle campus. There’s a community banana stand staffed by “banistas” and white boards on the walls of building elevators. Amazon has a dog-friendly vibe at its Seattle office, which carried over to Metropolitan Park, where there’s a public dog park, and a gallery wall of the dogs of Amazon employees. The towers feature plant-filled terraces and a rooftop urban farm that echoes the feel of the “Spheres,” botanical gardenlike workspaces that anchor Amazon’s Seattle office.

Metropolitan Park is the first phase of Amazon’s new Arlington headquarters, called HQ2.

Tasha Dooley

Amazon is opening HQ2 at an uncertain time for the company and the broader tech sector. Many of the biggest companies in the industry, including Amazon, have eliminated thousands of jobs and reined in spending following periods of slowing revenue growth and fears of a recession ahead.

Companies have also been confronting questions about what work looks like in a post-pandemic environment. Many employees have grown accustomed to working from home and have been reluctant to return to the office. Amazon last month began requiring corporate employees to work from the office at least three days a week, which generated pushback from some workers who prefer greater flexibility.

Amazon tweaked the design of HQ2 around the expectation that employees wouldn’t be coming into the office every day.

Communal work spaces are more common, and there’s less assigned seating, Schoettler said. Employees may only be at a desk 30% of the day, with the rest of their time spent in conference rooms, or having casual coffee meetings with coworkers, he said.

“If we don’t come in that day, no one else will utilize the space,” Schoettler said. “And so that way, you can come in, the desk is open and it’s not been personalized with family photos and that type of thing. You can sit down and absolutely utilize the space, and then go off about your day.”

Amazon’s HQ2 features some of the same quirks as its Seattle headquarters, like a community banana stand.

Tasha Dooley

The shift to a hybrid working environment has also influenced the further development of HQ2. Amazon in March said it had pushed out the groundbreaking of PenPlace, the second phase of its Arlington campus. PenPlace is expected to include three 22-story office buildings, more than 100,000 square feet of retail space and a 350-foot-tall tower, called “The Helix,” that features outdoor walkways and inside meeting areas for employees surrounded by vegetation.

Amazon will observe how employees work in the two new Metropolitan Park buildings to inform how it designs the offices at PenPlace, Schoettler said.

Amazon didn’t say when it expects to begin development of PenPlace, but it is continuing to move forward with the permitting and preconstruction process, Schoettler said.

“We just want to be really mindful, since we’re just opening these buildings, to make sure we’re doing it right,” Sullivan said. “These are large investments for us. We own these buildings, and we want to give them a long shelf life.”

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Confronting aging: How LGBTQ+ seniors can tackle their special caregiving challenges

Margaret Roesch, 67, and her wife, Pat McAulay, 68, wanted to have a supportive community around them as they grew older. So they helped to create a cohousing development for LGBTQ+ seniors and allies, making it easier to offer support to one another. 

“We said we don’t want to have to go back in the closet when we get older,” Roesch said from the front porch of her home in Durham, North Carolina. 

Opened in 2020, the Village Hearth is a neighborhood of 28 one-story accessible homes for residents ages 55 and up — and one of the few housing developments in the country specifically designed with LGBTQ+ people and allies in mind.  

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“We decided that we were going to be better in community, after having spent eight lonely years in Florida,” McAulay said. “It’s so rewarding to know there’s 30-some people here who have our backs.” 

“I find it very refreshing,” Roesch added.

“We’re all … going to die. People will get sick,” she said. “These things are going to happen, but we also find that we are really good at taking care of each other.”

How to avoid ‘the closet’ while ensuring good care

Older adults in the LGBTQ+ community are twice as likely to be single and four times less likely to have children as their non-LGBTQ+ peers, according to SAGE, a national advocacy organization for LGBTQ+ elders. They may also be estranged from members of their family who don’t accept their sexual orientation and/or gender identity.

“A lot of people in their 70s and 80s who have been closeted, they don’t feel safe and they remain closeted while going through care — that’s a stress,” said certified financial planner Stephanie Lee, founder of East Rock Financial in San Francisco. “You’re trying to get a caregiver, and you’re hiding who you are or hiding your relationship.”

The Village Hearth is a 55-plus cohousing community for LGBTQ+ adults, friends and allies located in Durham, North Carolina.

CNBC

Experts say that makes it especially important to have an aging plan early. 

“As with any stage of life, planning is unique and personal to the individual,” said CFP Kyle Young, a senior vice president at Morgan Stanley Wealth Management in New York. “The key is to start a conversation, educate yourself and finalize plans to assure your wishes are made clear.”

Get legal documents to ensure wishes are followed

At Village Hearth, residents have taken steps to prepare their finances, arrange for care and consider end-of-life planning. They have held workshops on choosing financial and health-care powers of attorney, having an advance directive for medical decisions and finding an attorney to help draft those key legal documents. 

When you’re in the hospital or a care facility, “if you’re heterosexual, the spouse automatically gets visiting rights,” Lee said.

That’s not always the case for same-sex couples, even if they’re legally married. In a hospital or care facility, “if a couple has kept their relationship private from others, advance health-care directives and visitation authorization forms are critical to having the patient’s wishes upheld,” Lee said.

“It’s really critical to get the legal papers to get those visiting rights,” she said, “so you can make those decisions.” 

Develop a caregiving plan early

The earlier you start planning, the easier it is to take steps to follow your plan and meet your goals.

“Having the benefit of time on your side will allow you and your loved ones to make sound, clearheaded decisions while considering cost, tax and broader estate implications of your plans,” said Young, who works with many LGBTQ+ clients.

Having the benefit of time on your side will allow you and your loved ones to make sound, clearheaded decisions.

Kyle Young

senior vice president at Morgan Stanley Wealth Management

Use the time between retirement and needing services to identify your support network, consider your financial situation, and educate yourself about care options that are available, recommends Allison O’Shea, founder of Openly Aging, an advisory firm in Durham.

“A lot of people don’t think about that in-between time,” said O’Shea, who works with clients as a so-called aging advisor after running senior living centers for many years. “There’s a really big piece missing when it comes to what you could be doing to prepare.” 

Create a network of support

Build a support group — neighbors, family, friends, loved ones and professionals whom you know you can lean on. 

If you’re single or not sure if you have people around you who are willing and able to step in, O’Shea recommends hiring a geriatric care manager. These professionals, who may also be social workers, nurses, psychologists or gerontologists, deal with elder-care issues regularly. They can be your advocate, make sure you’re able to access resources, and organize the support you’ll need. 

Consider the range of care options available

It is critical to understand what options you can afford and where to find assistance. “Don’t let your finances scare you,” O’Shea said. “You can create a plan that fits around your finances.”

Getting a handle on your monthly income and assets in retirement can help you determine where and how you’ll receive care later on — whether aging in place in your home or downsizing, or moving into some type of senior living arrangement. 

Local senior centers can be a valuable resource for older adults to find community and information, and many are working to serve a more diverse population. FiftyForward, which has seven community centers in central Tennessee to support older Americans, is working to build more inclusive community, conducting research and hosting cultural competency training. 

“Our country is unprepared for the burgeoning older adult group,” said Gretchen Funk, FiftyForward’s chief program officer. Issues of service access and isolation affect seniors overall, but discrimination can exacerbate those challenges for the LGBTQ+ community. 

“As a society, we need to look at this for all of us, because we will all be facing that,” said Funk. “And there should be power in advocating together.”

Some care services may be free based on your income but have long waiting lists. Knowing where to apply and when could help you mitigate costs. 

“If you have a plan or if you’re educated in what the options are, you’re not stressed over these big life decisions when you’re in a … crisis,” O’Shea said. “You have a step-by-step plan already laid out which will only save you time and money.”

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There may never be a better time to create a retirement plan

Small businesses have new incentives to help their employees plan for retirement, thanks to Secure 2.0, a sweeping retirement reform bill signed into law late last year.

The incentives, which include tax credits that are especially attractive to businesses with 50 or fewer employees, are designed in part to encourage small companies to create retirement plans for their employees — especially the smallest firms, among whom less than half (48%) offer a retirement plan, according to research by Anqi Chen and Alicia Munnell of the Center for Retirement Research at Boston College, which uses 2019 U.S. Bureau of Labor Statistics data. 

But that’s changing, in part inspired by more attractive tax breaks and a highly competitive labor market in which every benefit matters more in the war for talent. Among companies not offering a 401(k) or similar plan, 42% say they are likely to begin sponsoring a plan in the next two years, according to a new survey report published May 2 by nonprofit Transamerica Institute and its Transamerica Center for Retirement Studies. Among those that are not likely to sponsor a plan in this time frame, 31% cited cost concerns. 

Before discounting plan sponsorship — especially for cost reasons — small businesses should consider the potential financial benefits Secure 2.0 has to offer. There are eligibility requirements and specific variables that can affect these benefits, so it makes sense to consult a tax advisor to help weigh the various options.

But as a general rule, these credits “add up to sizable benefits for employers looking to start plans,” said Amy Vaillancourt, senior vice president of workplace product, strategy and architecture at Voya Financial.

Here are some basic features of the legislation and points to consider in balancing costs and benefits — to both employer and employee.

A big tax credit can cut down on plan setup costs

Secure 2.0 created a souped-up credit to offset administrative costs associated with starting a qualified retirement plan. For businesses with between one and 50 employees, the legislation increased the percentage of coverage up to 100% of qualified start-up costs, up from 50%. There’s a $5,000 per year cap that’s available for three years. Larger businesses — those with 51 to 100 employees — are still eligible to receive up to 50% of plan start-up costs.

Employer contributions also generate tax advantages

Additionally, Secure 2.0 offers a new tax credit for five years to businesses with up to 100 employees who make employer contributions to a new defined contribution plan. This credit is designed to encourage small businesses to contribute to their employees’ retirement savings. The exact amount of the credit depends on factors such as the number of eligible employees and the number of years since the plan began.

The credit is especially beneficial to employers with 50 or fewer employees. For these businesses, the credit is up to $1,000 per year for each employee earning less than $100,000, and the amount of the credit reduces 25% each year starting in the third year, said Marc Scudillo, managing officer of EisnerAmper wealth management and corporate benefits. 

For larger businesses — those with 51 to 100 employees — the tax credit is based on a sliding scale.

Small businesses using the credit should talk to their tax preparer to understand how deductions for employer contributions will be reduced, said Kelly Gillette, a partner with accounting firm Armanino.

A smaller auto-enrollment credit can offset some costs

A $500 tax credit is available to small companies that add an automatic enrollment feature, available for the first three years, to a new or existing 401(k) plan. While this feature isn’t required until 2025, small businesses could choose to do it now and get the credit earlier, Gillette said. While auto-enrollment tends to increase participation, and thus add costs for a small business, the credit could help offset these added costs.

Starter 401(k) plan doesn’t require an employer match

Employers can now offer a starter 401(k) plan that allows them to take advantage of the applicable administrative tax credits even though they aren’t making contributions on their employees’ behalf, Scudillo said. Many small businesses don’t want or can’t afford to offer an employer match, but having this option can be a significant boon for employees. 

Seventy-one percent of respondents said they expect their primary source of income in retirement to come from what they save on their own in an employer-sponsored defined contribution plan, according to a recent survey from Natixis Investment Managers.

This new type of plan can be useful for recruiting purposes and for helping employees prepare for retirement, Scudillo said. The option is available to small businesses that do not have a plan in place.

Military families receive extra attention in legislation

Military spouses often lose out on the ability to save for retirement because they may not stay at a job long enough to qualify for retirement benefits or become vested. Secure 2.0 offers eligible employers a credit of up to $500 credit per military spouse that participates in the company’s defined contribution plan, provided certain conditions are met.

For instance,  military spouses must be immediately eligible to participate in the plan within two months of hire. Also, upon plan eligibility, the military spouse must be eligible for any matching or nonelective contribution that he or she would have been eligible for otherwise at two years of service.

The credit applies for three years and does not apply to highly compensated employees.

New Roth IRA options for small businesses

Secure 2.0 allows business owners to offer a Roth version within SEP IRAs and SIMPLE IRAs. These are often used by small businesses because they tend to have less administrative responsibilities than a 401(k),” said Eric Bronnenkant, head of tax at Betterment. The ability to offer a Roth option in these plans could benefit the owner directly, but it is also helpful for recruiting and retention purposes, Bronnenkant said. 

The self-employed are not left out of legislation

The retirement legislation also has multiple benefits available for all individuals, including the self-employed. One of these benefits is the increased ability to contribute more money to retirement after age 50. For 2023, the catch-up contribution limit is $7,500, compared with $6,500 in 2022 for people ages 50 and above. Under Secure 2.0, the catch-up contribution limit will increase even more for participants between the ages of 60 and 63 starting in 2025, Gillette said.

Additionally, the age at which people must take required minimum distributions from their traditional 401(k) or traditional IRA has increased. Beginning in 2023, Secure 2.0 raised the age that a person must start taking RMDs to age 73. What’s more, starting in 2024, there is no RMD requirement for Roth 401(k) and Roth 403(b) plans, so it puts them on par with a Roth IRA, which can also be a significant benefit, Gillette said.

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