Processing Union Payrolls Requires Collective Cooperation

Processing payroll for unionized employees requires the assistance of human resources, legal teams, company management, and labor relations, two industry experts said May 7.

Payroll professionals need to understand the terms and conditions of employees’ collective bargaining agreements to process payroll for them, said Kelly Seiltz Litersky, CPP, payroll manager for Amcor Flexibles North America, Inc. They must not make any assumptions about CBA requirements, since that can cause errors and lead to employers owing back wages and penalties.

"[Contract] rules can just be written differently but interpreted the same way, or be written the same but interpreted differently,” she said. “Keep your mind open and know what your union requirements are for each union.”

Most CBAs contain intricate provisions that affect one another, Litersky said at PayrollOrg’s 42nd Payroll Congress in Nashville. Payroll professionals can stay on top of things by tracking the effective dates of each provision. They should also note any payroll-related terms, including any clauses related to overtime pay, pay scales, and the basis or bases of pay.

Payroll departments must also be informed of any “silent language,” or terms that were agreed upon during contract negotiations that might not have been written into the contract, Litersky warned. Silent language might be verbally agreed upon or found in informal documentation made during the negotiation process.

To determine if silent language exists, payroll professionals should talk to company management, their legal team, and labor relations, Litersky said. They should also reach out if they have questions about the terms of a CBA.

Comparing a current or proposed CBA to its predecessor is another way for payroll to better understand the agreement and determine what changes are being made, said Jodi Parsons, CPP, senior director of payroll operations for the Kansas City Royals.

“Before you sign off on that final document, make sure you are comparing that final document to [the document] that you agreed upon in the final meeting to make sure that the language matches,” she said. “We have had several incidences where we somehow didn’t catch [the union] from reverting to language that we had not agreed to but didn’t catch before we signed.”

Representatives from payroll should be a participant in CBA negotiations, but many companies exclude them, Parsons said.

At the very least, payroll professionals should make a wish list with changes they want made to a CBA when it is being renegotiated, Litersky added.

“What do I want changed for next time? I make my list, I share it with the legal department and with [human resources], and I’ll share it again when negotiations come up,” she said. “You do have control over certain things. It might not be how a policy is written, how that CBA is written, or how employees are paid. But you own the payroll process.”

The wish list should indicate why payroll wants changes to be made to the CBA and the value that will result from the change, said Parsons. For example, a proposed change might save money for the company or increase the efficiency of the payroll process.

“Make sure you are documenting [the reasons],” Parsons said. “The individuals at the negotiating table might not share that information with the other side, but they have that additional information to know why they need to fight for that change.”