Mgmt 583
Chapter 9: Wage and Benefit
Bargaining
Fall 2008
Components of the CBA
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Wage Issues
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Wage & effort.
Benefits
Premium Pay
Nonwage Issues
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Union security (level of compulsory membership)
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Individual security/ seniority
Management rights
Discipline/discharge
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Components of the CBA
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Nonwage Issues (continued)
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No strike/no lockout
Contract term/duration
Contract administration
Bases for Union Wage Demands
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Equity
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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
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After certification (or recognition) the parties
begin preparations for contract negotiations.
Union Preparations
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Research management’s ability to pay.
Research BU’s ability to strike.
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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?
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Data and information is collected to support
bargaining demands.
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Employer’s profitability.
Employer’s sales growth.
Industry-wide trends.
National union’s agenda.
Member’s agenda’s/desires.
Management Expectations
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Quid pro quo

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Never give something without getting something
in exchange.
Cost minimization
Desire to remain competitive
Management’s Preparations for
Wages Issues
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Management’s Preparations
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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.
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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
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Base wage
Pay Scales and Pay Systems
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Two-tier systems
Cost of Living Adjustments (COLAs)
Not not forget effort!
Wage Issues

Premium Pay
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Overtime
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Rate
Eligibility
Shift Differentials
Holiday pay
Hazardous duty pay
Wage Issues
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Contingent Benefits
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Retirement

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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.
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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.
Salary
$500
SUB
$170
State Unemployment $230
$400
Wage Issues

Contingent Benefits (continued)
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Time off
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Vacations
Holidays
Military leave
Jury duty
Sick leave
Childcare/eldercare
Wage Issues
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Contingent Benefits (continued)
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Health insurance
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Eligibility
Dependent coverage
Deductibles
Co-payments
Dental insurance
Life insurance
Wage Issues
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Pay Structure – the wage rates for different
jobs.
Pay Form – how the compensation is to be
received.
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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.
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Premium pay
Productivity bonuses
Profit sharing
Gainsharing
SUBs
Wage Issues
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Pay System – cont’d
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Pay for Time Not Worked
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Paid holidays
Vacations
Military leave
Jury duty
Paid sick leave
Longevity Pay