ACT 10: WHERE ARE WE NOW AND WHERE DO WE GO FROM HERE?
June 29, 2012 marks the one year anniversary of the effective date of 2011 Wisconsin Act 10 – the Budget Repair Bill. Now that a federal court has confirmed Act 10’s constitutionality with two minor exceptions and with months of recall elections finally behind us, it is no stretch to suggest that the BRB will be the law of the land for some time. As a result, there is no better time for counties to take stock of what steps they have taken to transition into the post-BRB world and set goals for where they want to go in the future.
I. Legal Developments
A. Federal Court Decision
On March 30 2012, a Western District of Wisconsin federal judge issued a decision in the case of Wisconsin Education Association Council v. Walker which involved a lawsuit filed by several unions representing public employees who sought to overturn Act 10 on constitutional grounds. The opinion and order upheld Act 10’s core provisions limiting collecting bargaining for general municipal employees, but overturned the provisions of Act 10 requiring annual recertification of general municipal employee unions and preventing municipal employers from deducting union dues from the earnings of general municipal employees. The court eliminated the requirement of annual mandatory recertification of general municipal employee unions effective March 30, 2012. The court entered an injunction requiring a return to automatic dues deductions for all general municipal employees who voluntarily request it no later than May 31, 2012. On April 27, 2012, the judge stayed his decision as it applied to decertified employees. Counties are currently required to allow union employees in certified bargaining units to deduct union dues from their paychecks if voluntarily requested in writing by the employee. However, counties are not required to bargain with decertified employees or deduct dues from their paychecks while the decision is on appeal to the U.S. Court of Appeals for the Seventh Circuit.
B. WERC Issues Decision in Eau Claire County and Rules Governing Total Base Wage Bargaining
The Wisconsin Employment Relations Commission (WERC) held in Eau Claire County, Decision No. 33662 (Feb. 23, 2012), that matters relating to health insurance plan design such as deductibles and co-pays are prohibited subjects of bargaining with public safety employees under Acts 10 and 32. Under WERC’s decision, the only matter that a county may bargain with public safety employee unions relating to health insurance is premium contributions. All other matters relating to health care plan design (provider choice, network, deductibles, co-insurance, co-pays, covered procedures, etc.) are prohibited subjects of bargaining – counties cannot negotiate these items whatsoever. WERC’s decision is binding in future disputes before the WERC between public safety unions and local governments relating to bargaining of health care plan design.
The WERC’s decision in Eau Claire County stands in stark contrast to the Milwaukee County Circuit Court’s decision in Milwaukee Police Ass’n v. City of Milwaukee, Milwaukee County Circuit Court Case No. 11-CV-01586, wherein the court enjoined the City of Milwaukee from implementing a new health insurance plan because the City was obligated to bargain the changes with their public safety employee unions. Unlike the WERC in Eau Claire County, the court in City of Milwaukee did not issue a blanket ruling declaring matters to be mandatory or prohibited subjects of bargaining. The court’s decision in City of Milwaukee is limited to the issues and parties before the court and is not binding on other municipal employers.
The WERC issued its final emergency rules on total base wage bargaining on March 30, 2012. Along with providing a means of calculating the permissible increase in total base wages that may be bargained short of a referendum, the rules clarified that the distribution of any increase in total base wages is a mandatory subject of collective bargaining. The rules also define total base wages in a way that allows for inclusion of automatic pay progressions (other than for education credentials) in the calculation of total base wages.
II. Status of the Transition Process
A. The First Transition Steps: Review of Personnel Policies
When Act 10 became effective, counties with expired collective bargaining agreements suddenly had exclusive authority over the terms and conditions of employment for the vast majority of their employees. This new reality caused these counties to immediately begin the first step in the transition process of reviewing and revising their personnel policies. Many are now completing the review process and experimenting with new employment practices.
For those counties that delayed reviewing their personnel policies because their collective bargaining agreements did not expire until after 2012, we recommend beginning the review process immediately because the process can take up to six months or longer. All counties should review their personnel policies every two years to find out what policies are working and which need further revision. Counties should also follow innovative practices in other counties for ways to improve their policies.
B. The Next Transition Steps: Administration Manuals and Management Training
Act 10 has created a tremendous opportunity for counties to create a workplace that best fits the needs of the county, the employees and the community they serve. Along with the unilateral discretion to set work rules and polices comes the responsibility to effectively manage employees. Management policies such as recruitment and hiring, disciplinary practices, performance evaluations and investigation of employee harassment complaints should be set forth in an administration manual to ensure consistent and effective management practices. In counties without dedicated human resources personnel, management should be trained on best management practices and compliance with state and federal employment laws such as the Wisconsin Fair Employment Act and the Americans with Disabilities Act.
C. The Next Transition Steps: Review of Compensation Systems
Tossing out the “old union wage scale” sounds like a rather simple exercise. However, complexities arise in transitioning from a set pattern for progressing through an established wage structure to introducing concepts like merit pay into the compensation equation. As with any organizational change contemplated under Act 10, counties need to carefully work through the process of evaluating their current compensation model and determine what model best fits the needs of the county in the future. First, counties need to take stock of their current job categories. In most cases, there is no need to maintain the numerous job classifications under a union contract. Instead, counties should focus on creating categories that reflect the essential functions of a job. Next, counties must evaluate the appropriate level of pay commensurate with each job category. This analysis requires an evaluation of internal and external factors – in other words, a true labor market analysis. Finally, counties must begin the process of developing meaningful performance evaluation systems. Without all of these preliminary pieces in place, it will be difficult, if not impossible, for a county to transition into a system where top performers have a chance to earn recognition through merit increases.
Last year, the Association and County Mutual joined with Phillips Borowski in creating a consortium of counties dedicated to working through these issues together. There is always room at the table for additional counties beyond the 42 existing consortium members. If you are interested in learning more about the consortium’s activities, please contact the Association.