Mgmt 583 Chapter 9: Wage and Benefit Bargaining Fall 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!

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)  E mployer 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 $ 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