Oct 26, 2005 - NEW YORK (Reuters) - An internal memo sent to the Wal-Mart Stores Inc. board proposes numerous ways to hold down health care and benefits costs with less harm to the retailer's reputation, including hiring more part-time workers and discouraging unhealthy people from seeking jobs, the New York Times said on Wednesday.

The paper said the draft memo to Wal-Mart's board was obtained from Wal-Mart Watch, a pressure group allied with labor unions that says Wal-Mart's pay and benefits are too low.

The memo is quoted as expressing concern that workers with seven years' seniority earn more than workers with one year's seniority, but are no more productive, said the paper, which posted the memo on its Web site (http://www.nytimes.com/2005/10/26/business/26walmart.ready.html ). To discourage unhealthy job applicants, the paper said, Chambers suggests Wal-Mart arrange for "all jobs to include some physical activity (e.g., all cashiers do some cart-gathering),"

The memo also proposed that employees pay more for their spouses' health insurance, called for cutting the company's 401(k) contributions to 3 percent of wages from 4 percent and for cutting company-paid life insurance policies.

The memo acknowledged that Wal-Mart, the world's largest retailer, had to walk a fine line in restraining benefits because critics attacked it for being stingy on wages and health coverage. Chambers in the memo acknowledged 46 percent of the children of Wal-Mart's 1.33 million United States employees were uninsured or on Medicaid.

Wal-Mart executives said the memo was part of an effort to rein in benefit costs, which have soared by 15 percent a year on average since 2002. Like much of corporate America, Wal-Mart has been squeezed by soaring health costs, the paper said.

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