Labor Law Changes: Back to the Era of Union Dues Collection

To help school officials understand and prepare for pending changes to the Public Employment Relations Act (PERA) and the Revised School Code (RSC), upcoming editions of School Law Notes will include articles analyzing the new laws and implications for schools. This month’s topic is union dues deduction.

Since March 16, 2012, PERA Section 10 prohibited schools from using resources to assist labor unions in collecting dues. The Michigan Legislature recently passed legislation repealing this prohibition, which Governor Whitmer signed into law, with an anticipated effective date in March 2024 (91 days after the current Legislative session concludes).

Payroll Deduction of Union Dues/Service Fees

House Bill 4233 amends PERA Section 10 by removing language that currently prohibits using school resources to assist a union in the collection of dues or service fees from employee wages (i.e., payroll deduction). Additionally, House Bill 4357 amends State School Aid Act (SSAA) Section 164h, by eliminating a 5% state school aid penalty imposed on a school for having a collective bargaining agreement that provides for automatic union dues/fees deduction from employee wages.

After the effective date of PERA Section 10’s repeal, public school payroll deduction of union dues/fees will become a mandatory bargaining subject. This does not mean, however, that public schools will be legally required to use school resources to deduct union dues and fees (also known as a “dues check-off”). Instead, a school and union must bargain in good faith over a union’s proposal to use school resources to deduct union dues/fees from employee wages.

A school’s refusal to agree to a union’s dues/fee deduction proposal is also not a failure to bargain in good faith. PERA Section 15(1) states that the duty to bargain collectively “does not compel either party to agree to a proposal or make a concession.” Nor is it an unlawful interference with the right to engage in union activity. Schools that receive a union demand to bargain over payroll dues deduction should contact legal counsel to confer about the advisability of doing so, even if their current collective bargaining agreement prohibits negotiating mid-term.

Employer Considerations

In deciding how to respond to a union proposal for dues/fee deduction language, school officials should consider several legal and practical issues.

First, the PERA amendments do not affect an employee’s right to not pay union dues/fee membership. The U.S. Supreme Court held that a mandatory dues/fee payment (also known as “agency shop”) violates public employees’ First Amendment speech rights because the payment was subsidized “union speech.” Janus v AFSCME, 138 S Ct 2448 (2018). School officials should therefore not agree to new collective bargaining agreement language that violates this Court decision.

Before deducting union dues/fees, school officials must have accurate information as to which employees have authorized this deduction. Public sector employees maintain the right to end their membership affiliation with their union and opt out of future payroll deductions for applicable union dues/fees. The procedures an employee takes to authorize payroll deductions as well as to terminate that authorization occurs between a member and its labor union. This relationship requires employees to make their membership resignation and payroll authorization terminations with their union, not their employer.

Prior to 2012, when schools previously administered payroll deductions of union dues/fees, collective bargaining agreements frequently included “hold harmless” or indemnification language by which the union protected the employer from liability associated with the payroll deduction. With the enactment of the new legislation, schools that agree to union dues deductions should do the same.

When bargaining, school officials should also consider that agreeing to payroll deductions for union dues/fees will increase workloads and deplete school resources. A school’s concession to deduct union dues/fees from wages may open the door for school officials to ask for more in return at the bargaining table.

While Michigan courts have interpreted PERA to prohibit schools from garnishing employee wages to recoup union dues/fees, the PERA amendments will likely result in courts permitting this practice.

In 2011, the Michigan Supreme Court ruled that Section 57 of the Michigan Campaign Finance Act prohibits public employers from administering a payroll deduction request to contribute to a separate segregated fund (or PAC) established by a labor organization. Accordingly, no newly negotiated language may authorize deductions for union PACs.

Please contact a Thrun labor attorney if you have any questions regarding this pending legislation or if a union submits a demand to bargain over the deduction of union dues and fees.