Wisconsin Budget Bill Takes Tough Stance on Unions, Public Retirement Funds

By Troy D. Thompson

On February 11, Wisconsin Governor Scott Walker released details of his budget repair bill, a highly publicized measure directed at addressing the state’s budget crisis. Regardless of one’s political bent, there is no question that the bill, if adopted, will significantly change the landscape of public-sector employment in Wisconsin.

The bill takes a tough stance on collective bargaining, public pension funding, and public health insurance. Key union-related provisions of the bill would:

• limit collective bargaining to the subject of base wages while limiting base-wage increases to a percentage no greater than the change in the consumer price index;
• prohibit collective bargaining on matters not permitted under the Wisconsin Municipal Employment Relations Act;
• limit union contracts to one year in length;
• prohibit covered employers from collecting union dues through salary deductions while also permitting employees to remain in a union without paying dues;
• eliminate collective bargaining for employees of the University of Wisconsin system and the University of Wisconsin Hospitals and Clinics Authority and for certain home- and child-care providers; and
• require an initial certification election in April 2011 to determine whether a majority of bargaining unit employees still want to be represented by an existing union. If a union receives less than 51 percent of votes actually cast, then at the expiration of the current collective bargaining agreement, the union would be decertified. Certification elections of organized public-sector employers would be held thereafter on an annual basis.

Employers would also be authorized to discharge any state employee who fails to report to work as scheduled for any three unexcused working days during a state of emergency as well as any employee who participates in a strike, work stoppage, sit-down, stay-in, slowdown, or other concerted activities to interrupt the operations or services of state government, including mass resignations or sick calls.

The bill would also change the state retirement fund by requiring participating employees to contribute half of all required retirement contributions; employers would be prohibited from paying any of these required contributions. Further, employers would also be prohibited from paying more than 88 percent of the average premium cost of group health insurance offered in the lowest employee premium cost tier.

In support of the measure, Governor Walker cites numerous statistics detailing the rising cost of public employee benefits to taxpayers. For example, in 2011, Wisconsin taxpayers contributed more than $1 billion toward state employee health insurance premiums; however, state employees contributed only about $64 million toward their insurance — about 5.6 percent of the total cost. Similarly, in 2009, public employers contributed almost $1.37 billion to the state’s pension fund on behalf of their employees; employees contributed only $8 million, or about 0.6 percent.

If the bill is passed, covered employers would have to rapidly implement its sweeping mandates because the governor’s hard stance toward repairing the state’s financial situation lends little time for employers and employees to adjust to the law’s changes.

Read the full text of Wisconsin Senate Bill 11

Troy D. Thompson is the chair of the Labor & Employment Practice Group with Axley Brynelson, LLP. He may be reached at (608) 283-6746. Attorneys at Axley Brynelson write and edit the Wisconsin Employment Law Letter where you will be able to keep up with developments on Wisconsin Senate Bill 11 and other state employment laws issues and regulations.