Understanding the Impact of the WRS Changes

November 25th, 2011

While it’s been only a couple of months since the Budget Repair Bill and the State Budget became law, there is already an important arbitration decision on police contributions to the Wisconsin Retirement System (WRS) and some changes to the WRS employee categories.  This short report addresses these issues and ends with a short word on the upcoming union representation elections.

WRS CONTRIBUTION “INTERNAL COMPARABLE” NOT PERSUASIVE

Represented (unionized) public safety employees hired before July 1, 2011, are exempt from the requirement that public employees to pay a portion of their pension contributions.  This has created an inequity within many municipal workplaces, with some employees paying close to 6% of their wages toward retirement, and others paying nothing.

One factor arbitrators consider when deciding a case is the “internal comparable,” or how the terms and conditions of employment of the proposed contracts compare with those applicable to other employees in the same workplace.  If a municipality chose to go to arbitration with a public safety union over the WRS payment issue, it would presumably argue that all other employees are making the WRS contribution and, therefore, the internal comparables support the position that the public safety employees should also be making the payment.

However, in Oconto County, Decision No. 33283-A, issued November 14, 2011, the arbitrator rejected this argument.  Disregarding the internal comparable, the arbitrator stated that “the internal comparables have little, if any, weight in this case because the 5.8% WRS contribution was imposed upon them by law.”

This decision comes as no surprise.  Nevertheless, it is the first important arbitration decision we’ve seen concerning this issue and confirms that the legislatively-imposed WRS inequity will continue to be difficult to grapple with. 

ETF ISSUES GUIDANCE ON NEW WRS RULES

The Department of Employee Trust Funds has determined that the most efficient and effective way for it to overcome the challenges presented by recent changes in the law was to implement category changes for all employees in the WRS.  All employee category changes must be completed by December 16, 2011.  Please see the ETF website (etf.wi.gov/employers/ht_category_change.htm) for more information on these important changes.

UNION REPRESENTATION ELECTIONS

The new law requires annual union representation elections for many municipal labor unions.  For local governments, these elections could begin as early as January of 2012.  Most public employers have never been through a representation election, and are not familiar with what can or can’t be said during an election or the myriad other “dos and don’ts” which come with the process.  Keep your eye out for news about a special presentation which will be put on in the near future by Stafford lawyers on this subject.

If you would like additional information regarding the topics addressed in this short report, please contact Drew Cochrane or your Stafford Rosenbaum attorney.

Filed Under: Government Law, Employment and Labor Law

Note: The SR Short Report is published by Stafford Rosenbaum. The SR Short Report is provided for informational purpose only and should not be construed as legal advice or an opinion on specific situations. The legal issues raised by a particular situation may differ from those addressed in the publication. We encourage you to contact one of the Stafford Rosenbaum attorneys before making a legal decision.