Mgmt 583

Chapter 9: Wage and Benefit BargainingFall 2008

Components of the CBA Wage Issues

Wage & effort. Benefits Premium Pay

Nonwage Issues Union security (level of compulsory membership) Individual security/ seniority Management rights Discipline/discharge

Components of the CBA Nonwage Issues (continued)

No strike/no lockout Contract term/duration Contract administration

Bases for Union Wage Demands Equity

Internal Equity- Unions expect to meet or exceed levels for nonunion jobs in the firm.

Unions expect uniformity in how much workers make doing the same jobs at other plant locations in the company.

Ability to Pay – if the company makes a profit, they can afford to pay more.

Standard of Living – unions expect the purchasing power of worker’s wages to be maintained. COLAs

Union’s Preparations for Wages Issues After certification (or recognition) the parties

begin preparations for contract negotiations. Union Preparations

Research management’s ability to pay. Research BU’s ability to strike.

Can they muster a strike vote? Does the national have a sufficient strike fund?

Union’s Preparations for Wages Issues

How well is management prepared for a strike? Data and information is collected to support

bargaining demands. Employer’s profitability. Employer’s sales growth. Industry-wide trends. National union’s agenda. Member’s agenda’s/desires.

Management Expectations Quid pro quo

Never give something without getting something in exchange.

Cost minimization Desire to remain competitive

Management’s Preparations for Wages Issues Management’s Preparations

Top level management establishes bargaining limits. Predict probable union demands. Anticipated demand will under go thorough cost analysis.

Three most important words in collective bargaining: Cost! Cost! Cost!

Management’s Preparations for Wages Issues

Data and information is collected to support bargaining demands.

Industry wage rates. Local labor market wage rates. Cost of living information. Cost of benefits. Cost of overtime. Industry/market trends. Other relevant economic information.

Wage Issues Wage and Effort Clause

Base wage Pay Scales and Pay Systems

Two-tier systems

Cost of Living Adjustments (COLAs) Not not forget effort!

Wage Issues Premium Pay

Overtime Rate Eligibility

Shift Differentials Holiday pay Hazardous duty pay

Wage Issues Contingent Benefits

Retirement Funded v. nonfunded Defined benefit v. defined contribution Vesting Eligibility to draw benefit

SUBs Severance pay

Supplemental Unemployment Benefits (SUB)

Employer supplements state unemployment benefits to ensure a guaranteed level of income. Example: A union negotiates an 80% SUB in the CBA. An employee made weekly salary of $500 (80% = $400) The maximum Weekly Benefit Amount (WBA) allowed in

Mississippi in 2008 is $230.00.

State Unemployment $230

SUB $170

$400

Salary $500

Wage Issues Contingent Benefits (continued)

Time off Vacations Holidays Military leave Jury duty Sick leave

Childcare/eldercare

Wage Issues Contingent Benefits (continued)

Health insurance Eligibility Dependent coverage Deductibles Co-payments

Dental insurance Life insurance

Wage Issues Pay Structure – the wage rates for different

jobs. Pay Form – how the compensation is to be

received. Cash Automatic deposit Insurance payments Deferred income

Wage Issues Pay System – establishes methods by which

it is determined what each individual employee will earn in his/her job. Premium pay Productivity bonuses Profit sharing Gainsharing SUBs

Wage Issues Pay System – cont’d

Pay for Time Not Worked Paid holidays Vacations Military leave Jury duty Paid sick leave

Longevity Pay