1. Mgmt 274
Wage and Benefit Bargaining

2. 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

3. Components of the CBA
 Nonwage Issues (continued)
 No strike/no lockout
 Contract term/duration
 Contract administration

4. 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

5. 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?

6. 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.

7. Management Expectations
 Quid pro quo
 Never give something without getting something
in exchange.
 Cost minimization
 Desire to remain competitive

8. 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!

9. 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.

10. 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!

11. Wage Issues
 Premium Pay
 Overtime
 Rate
 Eligibility
 Shift Differentials
 Holiday pay
 Hazardous duty pay

12. Wage Issues
 Contingent Benefits
 Retirement
 Funded v. nonfunded
 Defined benefit v. defined contribution
 Vesting
 Eligibility to draw benefit
 SUBs
 Severance pay

13. 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.
SUB $170
State Unemployment $230
$400
Salary
$500

14. Wage Issues
 Contingent Benefits (continued)
 Time off
 Vacations
 Holidays
 Military leave
 Jury duty
 Sick leave
 Childcare/eldercare

15. Wage Issues
 Contingent Benefits (continued)
 Health insurance
 Eligibility
 Dependent coverage
 Deductibles
 Co-payments
 Dental insurance
 Life insurance

16. 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

17. 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

18. Wage Issues
 Pay System – cont’d
 Pay for Time Not Worked
 Paid holidays
 Vacations
 Military leave
 Jury duty
 Paid sick leave
 Longevity Pay