What is a union deduction?

Employees belonging to a union are subject to mandated deductions as defined in the collective bargaining agreement (CBA) to help fund the management of the union, legal fees for any disputes, training, and other union-sponsored activities.  The union deduction is reduced from the employee’s paycheck and paid to the union by the employer each pay period or other defined frequency.  

Union deductions vary in how they are reduced as some are an hourly rate (e.g. training fee of $0.25/hr), while others are based on the employee’s gross earnings (e.g. union dues are 3% of pay-period or annual gross wages).

Example of a union deduction scenario:

Employee A as an apprentice has to pay the union a per pay period deduction of 3% of gross wages and $0.30/hr for future training.  If they are making $18/hr as referenced in example above and work 40 hours ($720/weekly gross wages), they would pay their union $12 for training costs (40 hours x $0.30/hr) and $21.66 in union dues ($720 gross wages x .03).

Most Time and Attendance systems are not designed for these complexities.


How can IDI help?

IDI can automate your time-consuming processes!  Our Time Bank™ Multiple Labor Rates solution can be enhanced to automate the union deduction for companies employing unionized workers, which requires paying contract-mandated union wage rates,  union benefit rates, as well as collecting union deductions. Our solution removes the need to rely on time-consuming and error-prone manual calculations for compliance.

When Time Bank is run at the end of the pay period, it retrieves the time and labor information from the time system and associates the specific rates of pay, including any premiums and benefit earnings, with the union, job, and worker classification, as well as the correct union deductions.  After determining rates, Time Bank calculates the weekly average rate of pay, or FLSA rate, used for all overtime hours in accordance with FLSA guidelines.

With the click of a button, Time Bank reads the labor rates and the deduction rates from a stored user-maintained table or from a client-provided comma-delimited file, the calculation is made, and the results are passed to payroll.

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ADDITIONAL RESOURCES:

Department of Labor

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