Understanding the stalled contract negotiations between the state and AFSCME

Mailee Smith

Senior Director of Labor Policy and Staff Attorney

Mailee Smith
August 26, 2016

Understanding the stalled contract negotiations between the state and AFSCME

An administrative law judge could issue a decision as early as Sept. 1 on whether Illinois state workers and the governor are at an impasse in contract negotiations. Here’s a rundown of the proceedings between Illinois’ largest government-worker union and the state, as well as their potential impact on residents and state employees.

Tension between Gov. Bruce Rauner and the American Federation of State, County and Municipal Employees will heat up again soon.

AFSCME and the state have been without a contract for over a year. While at least 18 other unions have negotiated contracts with the state, AFSCME is demanding benefits unsustainable for a state in financial crisis.

Negotiations between the parties stalled in January 2016. Rauner then asked the state’s labor relations board to determine whether the parties are at an impasse, or stalemate. An administrative law judge conducted hearings on the impasse issue between April and June 2016.

In July, the administrative law judge, or ALJ, indicated she would likely issue her decision on whether AFSCME and the state are at impasse in early September – possibly as early as September 1.

With that decision looming, now is a good time to recap the steps that have led the state and AFSCME to this point and to show how the contract dispute might affect the parties, ordinary residents and the workers themselves.

What is AFSCME?

AFSCME Council 31 is the state’s largest government-worker union.

AFSCME represents approximately 35,000 state employees throughout Illinois’ agencies and departments, such as the Department of Revenue and the Department of Corrections.

AFSCME represents a range of employees, from well-paid interns to administrative assistants to revenue agents to physician specialists.

When did AFSCME’s contract with the state expire?

AFSCME’s contract with the state expired June 30, 2015.

Do state workers continue to work, even without a contract?

Yes. In fact, AFSCME and the state have entered into three tolling agreements, which are signed contracts binding the parties to continue negotiating in good faith until either a contract is reached or impasse occurs. The union agreed not to strike, while the state agreed not to lock out workers.

The third tolling agreement is in effect and, according to the parties’ promises, will

“remain in effect until impasse is reached.” Under that agreement, either the union or the state can ask the Illinois Labor Relations Board to decide whether an impasse exists in negotiations.

What happened with negotiations between AFSCME and the state?

AFSCME and the state engaged in 67 days of meetings and 24 formal negotiating sessions, with more than 300 different proposals.

In a Jan. 15, 2016, letter to state workers, Rauner explained that negotiations broke down when an AFSCME representative left negotiations stating, “I have nothing else to say and am not interested in hearing what you have to say at this point – carry that message that back to your principals.”

Rauner then asked the Illinois Labor Relations Board to declare the parties are at impasse, or stalemate. A decision on impasse is pending, and is expected to come from the AJL sometime around Sept. 1. In the likely event a party appeals that ruling, final resolution may not come for quite some time.

The ALJ held hearings on the impasse issue from the end of April into early June. After that, the parties submitted additional written arguments.

Once the ALJ issues her recommended decision sometime in early September, either party can ask the Illinois Labor Relations Board to reconsider that decision. Once again, the parties will file written arguments. The board will then decide whether negotiations are at impasse – but the board will not likely consider the issue until its November meeting.

What benefits do AFSCME employees already receive?

Illinois state employees are the highest paid state workers in the nation, when adjusted for cost of living.

In addition, AFSCME workers receive Cadillac healthcare benefits. This means workers receive what is considered platinum-level benefits under the Affordable Care Act, but the employees pay bronze-level prices for them. Taxpayers subsidize a whopping 77 percent of the average AFSCME worker’s health care, which costs taxpayers $14,880 a year per worker.

And if an AFSCME employee works for 20 years or more, he or she gets free health insurance at retirement. This benefit alone costs taxpayers $200,000 to $500,000 per employee.

On top of all of that, state retirees on average receive $1.6 million in pension benefits.

What is AFSCME demanding?

AFSCME’s demands are at the crux of the stalemate in negotiations. Among its demands are wage increases of 11.5 to 29 percent by 2019, platinum-level health insurance at little cost to workers, and a workweek with overtime for workers after just 37.5 hours.

The governor estimates that AFSCME’s current demands would cost the state an additional $3 billion in wage and benefit increases. In a letter to state employees, he explained that the wage-increase demands alone would cost the state nearly $1 billion.

What is Gov. Bruce Rauner offering to state employees?

Rauner’s most recent offer would let AFSCME keep their current salary levels, which already make Illinois state workers the highest-paid state workers in the nation when adjusted for cost of living. In addition, many other lavish perks – practically unheard of in the private sector, such as lax disciplinary rules allowng workers to have up to 10 unauthorized absences without repercussions – would continue under Rauner’s last offer.

But Rauner is also trying to bring union costs in line with what taxpayers can afford, as well as avoid widespread layoffs.

To that end, Rauner has proposed a temporary four-year wage freeze. But he has also proposed over $200 million in additional compensation in the form of bonuses when employees meet simple, objective standards – such as not having unexcused absences.

Instead of continuing to provide platinum-leave health insurance at bronze-level prices, the governor is seeking to realign AFSCME workers’ health care costs so they more closely match the benefits workers receive.

And the governor has requested a 40-hour workweek, as opposed to a 37.5-hour week, before covered state employees are eligible for overtime.

“What contract provisions did the other 18 unions ratify in their negotiations with the state?”

At least 18 other unions have already negotiated contracts that include several of the core provisions AFSCME has rejected.

On May 17 the Illinois Federation of Teachers, representing educators at the Illinois School for the Deaf, ratified a collective bargaining agreement that includes provisions addressing the state’s ongoing financial crisis, including a four-year temporary wage freeze, implementation of merit pay for conscientious workers, and changes to the state-provided health insurance program that allows employees to keep their current premiums, maintain their current coverage or mix and match to best suit their needs.

The Teamsters reached an agreement with the state in August 2015. That agreement includes a four-year wage freeze, continuation of a 40-hour workweek and the implementation of a bonus system for employees meeting or exceeding expectations.

What happens if the labor board agrees that negotiations are at impasse? What happens if the labor board disagrees?

If the labor board agrees that the parties are at impasse, Rauner can implement his last and best offer to AFSCME. AFSCME, in turn, can choose to go along with that offer, or it could choose to strike.

If the labor board disagrees that the parties are at impasse, the parties will go back to negotiations.

Either way, the losing party will be entitled to appeal the board’s decision to the state courts. That means final resolution could be months away, even after the labor board issues its decision.

Will AFSCME go on strike if an impasse is declared?

In July 2016, it was reported that AFSCME had started polling its members on their willingness to strike. AFSCME has not denied that it is polling its members.

What happens to Illinois residents if AFSCME goes on strike?

State operations will continue even if AFSCME goes on strike. The state is free to hire temporary replacement workers to ensure state operations continue. In preparation, state agencies have already started developing contingency plans to keep the state running smoothly. The governor’s office has labeled contingency planning a “top priority.”

In addition, the safety of Illinois residents will be protected. Illinois labor law places limits on which state workers can strike. Police officers, security employees at jails, paramedics in fire districts and fire fighters are prohibited under Illinois law from striking.

What happens to an AFSCME member who goes on strike?

The state has estimated that a striking worker would lose at least $8,000 a month in lost wages, additional health insurance contributions and state pension contributions. When the last contract expired, the state’s largest government-worker union had no strike fund to help workers cover their costs.

And based on general labor laws, employees might not be immediately reinstated to their old jobs when the strike ends.

What happens to an AFSCME member who goes to work?

The union can penalize members who do not honor the strike.

In early August 2016, it was reported that AFSCME may fine members as much as $5,000 if they cross the picket line. AFSCME later denied the rumor – but regardless of whether AFSCME leaders have threatened fines, the union can punish members for breaking a strike.

Is there a way to avoid union penalties for going to work?

Yes – an employee can become a fair share payer.

What is a fair share payer?

A fair share payer is a nonmember who pays a fee that is supposed to represent his “fair share” of what it costs AFSCME to represent him in negotiations and other matters with the state. Under state law, that fee will not exceed the amount of dues required of members, and it cannot be used for political contributions.

As a nonmember, a fair share payer is not subject to AFSCME’s rules or disciplinary actions. As such, a fair share payer can choose not to strike without facing any repercussions from the union.

How does an AFSCME member become a fair share payer?

An AFSCME member can become a fair share payer in three easy steps:

  1. Visit http://illin.is/optout – this is the state’s online portal for employees.
  2. From there, a worker can follow the prompts to inform his or her agency that the worker has changed his or her status from union member to fair share payer.
  3. A form letter that informs AFSCME that the worker is opting out of membership and changing his or her status to “fair share payer” can be downloaded and printed. The worker just needs to fill in personal information (agency, facility and contact information) and send it to AFSCME.

Will a worker maintain salary and benefits if he or she becomes a fair share payer?

By law, fair share payers still receive union representation and therefore are entitled to all rights secured in union-negotiated contracts. The union must represent nonmembers fairly and without discrimination in all matters covered in the contract.

In other words, fair share payers would still be entitled to any of the following benefits, among others, granted under the AFSCME contract or under state law:

  • Salary and raises
  • Health insurance
  • Pension
  • Seniority
  • Overtime pay
  • Leaves of absence (including sick leave)
  • Vacation days, holidays
  • Working conditions
  • Representation in a grievance process

What’s more, fair share payers are not subject to any union rules or discipline.

What does a union member lose if he or she becomes a fair share payer?

Fair share payers are not entitled to extra “perks” AFSCME itself gives to its members. Examples may include:

  • Voting (on ratification of contract, decision to strike, etc.)
  • Holding union office, representing the union as a delegate to the convention
  • Utilizing union-negotiated discounts (for things such as additional life insurance, health clubs, tickets to events, etc.)
  • Maintaining any liability insurance that the union may be providing to the employee
  • Receiving the AFSCME magazine/newsletter
  • Attending AFSCME events (meetings, picnics, Christmas party, etc.)

Who has the most to lose if AFSCME strikes?

AFSCME members themselves appear to have the most to lose if AFSCME goes on strike. AFSCME members are in a catch-22:

  • If they choose to strike with their union, they could lose $8,000 a month in lost wages, additional health insurance contributions and state pension contributions. AFSCME has no strike fund. And there is a chance members would be out of work for a long period of time.
  • If they choose to work, AFSCME could penalize them.

There are no easy answers for AFSCME members.

But the union cannot penalize fair share payers who cross the picket line to work.

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