By D&K’s School and Higher Education Law Team
2011 Wisconsin Act 10 changes the way that state statutes apply to wage payments that are made to many school employees.
Under current state law, every employer is required to pay every employee all wages earned on at least a monthly basis. In this regard, state statutes specify that wages must be paid for all wages earned “not more than 31 days prior to the date of payment.” Wis. Stat. § 109.03(1).
The same statute, however, includes exceptions to this rule that have historically applied to any number of school employees. For example, this requirement has not applied to employees covered under a valid collective bargaining agreement establishing a different frequency for wage payments. The rule has also not applied to “[s]chool district and private school employees who voluntarily request payment over a 12-month period for personal services performed during the school year, unless such employees are covered under a valid collective bargaining agreement which precludes this method of payment.” School employees have often been paid over a 12-month period for services performed during the school year because of these statutory exceptions. See, Wis. Stat. § 109.03(1)(a) and (b).
Act 10 creates Wis. Stat. § 118.223, which states that “[e]xcept as provided under subch. IV of ch. 111, no school board may collectively bargain with its employees.” In turn, Wis. Stat. § 111.70(1)(a), as amended by Act 10, generally redefines “collective bargaining” for school employees to concern “wages” only. Further, Act 10 creates Wis. Stat. § 111.70(4)(mb), which prohibits collective bargaining over “[a]ny factor or condition of employment except wages, which includes only total base wages and excludes any other compensation …”. Consequently, bargaining with a collective bargaining representative to pay school year employees over a 12-month period now appears to be prohibited, but state statutes only permit wage payments over that period of time if a collective bargaining agreement provides for it or if a school district employee voluntarily requests it.
Consequently, if there is no collective bargaining agreement in effect that provides otherwise, a school district will only be able to pay a school district employee for personal services performed during the school year over a 12-month period if the employee “voluntarily request(s)” this frequency of payment. This change in how state statutes apply to school employees could affect teachers and school year employees, as well as a more limited number of administrative and non-represented personnel that do not work a full calendar year.
To be sure, the statute requires less frequent payment than most school districts already provide by requiring that wages be paid at least every 31 days; however, the schedule of payment that is mandated by statute still requires more frequent payments than school districts often use for school year employees. In addition, a district’s approach to this issue can influence whether and in what proportions wage payments are made in one or two distinct statutory school years for services that were performed in the first year alone. As a result, the timing of district wage payments can have an impact on budget projections as well as borrowing strategies.
School districts should determine whether and/or when to adjust pay periods to conform to state statutes, and also should decide if offering employees an opportunity to voluntarily agree to payment over a 12-month period is advisable. If a school district does wish to continue making payments over a 12-month period to school year employees, the district will need to take care to ensure that this option is available to all school year employees and that the district can establish that the employee’s participation is truly “voluntary.”
For further information, please contact your Davis & Kuelthau, s.c. attorney.