Governor Walker Signs Bill Allowing Unions and Municipalities to Agree to Salary or Benefit Reductions Without Triggering Act 10 Provisions

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November 11, 2011

On Thursday, November 10, 2011, Governor Walker signed Assembly Bill 319 which allows any municipal employer to enter into one memorandum of understanding with a union to reduce the cost of compensation or fringe benefits, and the change will not be considered a modification of the current collective bargaining agreement for purposes of Act 10. The memorandum has to be entered into within 90 days after the effective date of this bill, which will be the day it is published by the Secretary of State. This date is not certain; however, the bill must be published no later than 10 days after the signing by Governor Walker. Act 10 provides that a school district or a technical college district and the union may enter into one memorandum of understanding to reduce the cost of compensation or fringe benefits in the collective bargaining agreement that covers the employees if the collective bargaining agreement was in effect on July 1, 2011. State Representative Evan Wynn (R-Whitewater) proposed Assembly Bill 319 earlier this year to extend this same flexibility to all municipal employers. “This bill is very similar to the provision that was included in the budget that allowed school districts to reopen contracts without any consequences,” said Rep. Wynn. “It allows local unions that are willing to give some concessions for the good of the local budgets to renegotiate some parts of the contract with the employer.” In a press release dated September 29, 2011, Wynn added that “[i]t’s really a win-win situation. The workers are able to avoid layoffs and the municipality or school district is able to balance the budget without cuts to services.” Municipal employers should consider this new flexibility when making budget decisions.

If you have questions regarding the above, please contact any of the attorneys on the Local Governments Focus Team, or the School Districts Focus Team of Ruder Ware.

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