Ready for the Employee Free-Choice Act?

March 10, 2009
Employers will need tools to comply.

Ready or not, here comes the Employee Free-Choice Act, a piece of pending legislation that encourages employee union representation and collective bargaining. According to the AFL-CIO, workers are fired in 25% of private-sector union-organizing campaigns. The Act attempts to address that issue with provisions to reduce barriers to unionization. While the Act was tabled by the Congressional legislators in 2007, enactment appears likely in 2009.

Opinions of the Act and its impact can vary depending on which side of the paycheck you stand. But opinions aside, one thing is crystal clear -- employers will need to take a good look at the Act and prepare for the likelihood of a change in their operating environments that may include an increase in employee representation by labor unions. Many employers already know the risk of financial penalties associated with non-compliance of statutory regulations. A collective bargaining agreement will increase the scope of possible financial penalties associated with violations of a union contract.

What Does it Mean to Employers?

The big-picture view of this proposed legislation is that workforce rules are likely to get more complex. Employers already have to follow a large number of federal, state, and local labor laws that include limiting hours for minors, lunch hour and break requirements and many localized nuances in the labor codes. The rules for equalization of overtime pay, and how it is offered and administered are also complex. So, in one sense, the Act might be the straw that breaks the camel's back in terms of being able to manage workforce rules correctly.

Consistency in compliance -- whether enforcement of statutory regulations or the terms of a collective bargaining agreement -- requires good workforce management (WFM) software and business-process automation associated with the management of scheduling and pay rules. This is especially true for those companies doing business in multiple states in the U.S., which face numerous and potentially conflicting labor rules, depending on the locations of the employees.

Now, if the Act becomes law, more local unions are likely to form -- and with that, the possibility for additional workforce rules. These rules could also potentially vary by region. Compliance with the myriad of rules is likely to become too difficult and time-consuming for the average manager to follow unless he or she can depend on WFM technology tools that provide the required flexibility in implementation and consistency in performance.

Business Logic Guides the Way

When there is a company policy change or a union-negotiated change, new business logic is needed within WFM software to address each new scheduling and pay rule. This requires a level of configuration in WFM solutions, so that employers have the flexibility to adapt to new union rules and make sure they're following contracts and agreements without needing to think too hard about it from day-to-day. Setting up the business rule logic in software automatically guides scheduling and related activities. This prevents the expensive "gotcha" moments, such as when employers unknowingly violate specific rules.

Tracking and Decision Making

WFM software also is needed as a system of historical record, to allow employers to go back and accurately demonstrate compliance in arbitration or to calculate retro-pay accurately, if needed. In this sense, a good flexible WFM system means you are covering all the bases, documenting compliance and minimizing risk. Besides, if the employer isn't documenting compliance, then arbitrators could create an inaccurate and inflated estimate of an employer's obligations. That's not a winning hand to play.

With the availability of such historical data, employer's can leverage the access to help make future decisions and mitigate risk of facing similar issues in the future. When you can use the information to help model future scenarios and thus you are better prepared to shape the course of potential changes to a union contract.

Value for Employees

Implementing WFM software also helps workers. Newly negotiated contracts are more likely to be executed correctly with WFM software in place. For example, payroll errors are reduced and tracking of benefits and vacation time is more accurate when WFM software is implemented. This is reflected in job satisfaction and employee tenure. Also, high performing employees tend to get noticed and are rewarded with better shifts, as WFM software benchmarks performance and assists with scheduling of workers. With the right tools, managers can accurately compare employee performance and fairly reward those employees who are making strides.

The key is to build systems with flexibility, prepare for the likelihood of change, and select tools that enable changes to be easily implemented and consistently managed. Anyone who has worked as part of a major IT project knows that configurable solutions are better than "customizable" solutions in terms of IT costs, deployment time, and total cost of ownership. That's a good thought to keep in mind as you study the situation and look to the future. Just as the Boy Scouts say, be prepared!

Jon Lawrence is VP of Product Marketing for RedPrairie, which provides workforce management software applications.

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