Pending Michigan Legislation Will Have a Profound Impact on Public Sector Employees

FOR IMMEDIATE RELEASE
(Free-Press-Release.com) June 13, 2011 --

As most of you already know the State Legislature has been working feverishly crafting bills targeting public sector wages and benefits, imposing cost sharing mandates and vastly changing longstanding collective bargaining standards. The overall impact of these bills, if passed, would be unprecedented. The outcome could result in unilateral wage and benefit reductions outside the collective bargaining process. These bills, if signed into law by Governor Snyder, would surely be challenged in the Courts. For now however, the mere presence of these bills has created enough stir to change the dynamic of bargaining for plan benefits. In particular, Senate Bill 7 (SB7) and House Bill 4172 look to impose a health care plan premium cost sharing mandate. In SB7 the employer would be responsible for no more than 80% of the total annual cost of all medical plans' (based on a premium or illustrative rate). Conversely, this would mean employees would now be responsible for 20% or more of the premium cost in addition to plan deductibles, coinsurances and co-pays. For municipal officials and union representatives this would thrust them into un-charted territory where both sides would be looking for lower-cost plans (i.e. with higher co-pays and deductibles); municipalities because of cost savings and unions to find good but affordable plans for their members.

At the writing of this article, House Bill 4152 was approved by the Governor. This bill would freeze benefit levels and limit retroactive wage increases after the expiration date of a current CBA. The bill is viewed by unions as an attack on their collective bargaining rights and would significantly impact 312 arbitration awards. For municipalities, this bill, as well as House Bill 4522, would serve to create a more "employer" friendly set of arbitration standards addressing the long time concern of public officials that they have been unable to modify personnel costs and adjust with the times because of antiquated 312 rules biased in favor of unions.

As with any new law, there are many un-intended consequences. Since many of the proposed changes specifically address an employee's obligations, not retirees, many employees near retirement age have been advised by their union leadership to consider retirement as a way to potentially avoid a bill's impact through their retirement years.

In all, between the recent passing of the EFM bill and the looming changes that could come about from these pending bills, we are headed for some very interesting days this summer.

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