Impact of Collective Agreement Changes on Payroll Department:

Chapter 6 Discussion Choose three of the following changes that may be negotiated in a collective agreement and provide an example of how each would impact the payroll department.  Timing of changes  Changes to salaries, wages, overtime rates  Paid absences.  Group benefits  Retroactive payment dates  Method of payment for retroactive adjustment Group benefits The proposed negotiated increase to the group term life insurance benefit changes the coverage from 1.5 times the employee's annual salary to 2 times the annual salary. The payroll manager must discuss this change with the company's insurance provider to determine when they can have the change effective in the company's policy. It is the job of the payroll department to analyze the total cost of the group benefits plan and decide how that cost is to be allocated amongst all its employees. Once a plan is established, the payroll department deducts insurance premiums from employee paychecks (bi-weekly or at the end of every month). They also ensure regular payments are made to the chosen insurance provider. These are just some of the ways a group benefits plan can impact the payroll department of any company. However, although it may amount to a little more work, the advantages that a group benefits plan offers to employees far surpass the cons of the extra time and paperwork. Changes to salaries, Wages, overtime rates There is a proposed 1% salary and wage increase for all union members that will impact regular, overtime, and statutory holiday pay. The company's total current salaries and wages can be increased by 1% in the model software to see the effect of this expense on the company, as well as the increase to the statutory and non-statutory costs to the employer. The historical data on the company's overtime and statutory holiday payments can also be recalculated at the increased rates to determine an estimated effect on the company's expenses. (Ch6P-19) The most common issues discussed at the negotiation table, as detailed below, may also impact employer costs for Canada Pension Plan contributions, Employment Insurance premiums, Workers' Compensation, provincial health levies and other employee benefits. Salary and wage issues: • average wage rate, or rates of pay by job group or job classification • overtime premiums and premiums for working on Sundays • statutory holiday pay rates • allowances, for example, clothing and tool allowance amounts