As described by Monica Davey of The New York Times, Michigan “has long been a symbol of union might and an incubator for the American labor movement.” Perhaps that is why the December 11th passage of “right-to-work” legislation is of particular interest nationwide. For those living, working, and operating businesses in Michigan, however, the legislation may prove more than symbolic.

The two congressional bills comprising Michigan’s “right-to-work” legislation are House Bill 4003 and Senate Bill 116. Senate Bill 116, discussed below, applies to the private sector; House Bill 4003 applies to the public sector, with the exception of firefighters and police officers.

Under Senate Bill 166, employees may not only organize together, form, or join unions, but employees may refrain from those activities as well. Additionally, an employee’s employment or continued employment cannot depend upon membership in a union or payment of “agency fees” if the employee did not join the union. Currently, if an employee does not join or resigns from a union, the union would still represent the non-member and the non-member would receive all benefits from the collective bargaining agreement. And as a result of the union’s representation, the non-member employee would be subject to certain dues or “agency fees” in lieu of full dues. But, once “right-to-work” takes effect March 16, 2013, non-union employees cannot be compelled to pay dues, fees, or assessments to a union, charity, or other third party. Furthermore, an employer cannot enter into an agreement with a union that would impact an employee’s right to organize or right to refrain from organizing.

While federal law, specifically the National Labor Relations Act (NLRA), guarantees the right to organize and bargain collectively, Michigan’s “right-to-work” laws do not run afoul of the NLRA. The NLRA allows individual states to pass laws prohibiting union membership or payment of agency or union dues as a condition of employment.

Only time will tell whether or not the laws bolster Michigan’s economic health, and how employees will be impacted. Please contact Wright Beamer with any questions you have regarding the impact of this legislation on your business.