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May 19, 2011
House Bill 4152 Becomes Law:
Creates
Bargaining Leverage for Michigan Public Employers
by Barbara A. Ruga
On
May 18, 2011, the Senate passed House Bill 4152 without amendment,
and by sufficient votes to give it immediate effect when the Governor
signs the bill. Once signed, the Bill, which amends the Public
Employment Relations Act (PERA), will have the following immediate
impact:
·
Wages and benefits for public employees covered by
an expired collective bargaining agreement (CBA) will be capped by:
o
The wages and benefits in effect when the
Bill is signed if the CBA expired before the Bill's effective date or
o
The wages and benefits in effect when
the CBA expired for a CBA that expires after the Bill is signed.
§
Note: For public employers
experiencing an insurance cost increase right before contract
expiration, analyze what will be the wages and benefits in effect at
contract expiration, and consider when fashioning bargaining
proposals/tentative agreements.
·
Public employees will be required to
pay any increases to health, dental, vision "and other"
insurance premiums that occur after the CBA expires and before a
successor agreement is ratified.
o
The public employer is authorized to
payroll deduct the increased cost.
o
The increased cost does not include
increases due to a change in marital status.
§
E.g., An employee receiving single
coverage in 2010 who marries after the Bill's effective date pays the
increased cost for two person coverage in 2011 versus 2010, while the
public employer pays the increase caused by the change from single to
two person coverage, based on the costs in effect when the bill was
passed or the CBA expired, as explained above.
§
The increased cost includes only
increases that occur after expiration of the CBA. Increases
occurring right before expiration of the CBA become part of the
status quo "wages and benefits" when the CBA expires.
·
Public employees will not be entitled
to receive automatic increment or step increases embedded in the
CBA's wage or salary schedule when the CBA expires.
o
Automatic increment or step increases
being paid now must continue until the next automatic increment or
step increase is scheduled to take effect for CBAs that expired
before the effective date of the Bill.
o
Automatic increment or step increases
shall not be paid after CBAs currently in effect expire.
·
HB 4152 also prohibits the parties and
an arbitration panel (such as Act 312 for police and fire) from
agreeing after the CBA expires to retroactive wages and benefit
levels in excess of those in effect when the Bill takes effect or the
CBA expires, as explained above.
House
Bill 4152 is in addition to the so-called 80/20 bill (Senate Bill 7),
passed by the Senate on May 18, by a 25-13 vote. Senate Bill 7
addresses the level of public employer costs for health, dental,
optical and prescription benefits during the term of a CBA. As
of the writing of this article, SB 7 had not yet passed the House,
where the GOP controlled representatives prefer an annual cap on such
costs of $13,000.00.
House
Bill 4152 highlights the importance of negotiating contract
expirations before scheduled increases in wages and benefits.
Stay tuned for our updates as
new developments occur. If you have any questions about how HB
4152 affects your workplace, please contact your Clark Hill attorney.
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