SMACNA and SMART have come to an agreement in principle regarding the terms of a Memorandum of Understanding for Local Areas that Adopt the Crew Cost Method of Wage Equalization. The MOU defines the crew cost methodology for wage equalization and provides implementation and administrative direction. There still is some work to do to craft all the language and a side letter spelling out how the language will be interpreted for enforcement purposes, but we expect that to be completed in the very near future.
The MOU will be available to local parties that choose to negotiate over the issue. SMACNA recognizes that some members and areas will value the crew cost method and its administrative simplicity. However, it is for each local SMACNA Chapter and its contractor members to determine whether a change to the crew cost method is appropriate for their local conditions. The MOU language will not be a part of the SFUA and SMACNA has made clear it will not impose the MOU on an unwilling party should the issue be part of an Article X, Section 8 interest arbitration proceeding.
In addition to preserving the right of local parties to choose whether to adopt this methodology, SMACNA’s goal throughout the negotiations with SMART on this issue has been to preserve contractors’ business options and maximize flexibility. To that end, the MOU provides:
- An option for employers to pool wage equalization payments
- An option for employers to use their actual fabrication costs should they exceed the calculated crew cost for the area
- A process for employers to seek a waiver of wage equalization requirements
- Grievances against out of area contractors will bypass local JABs and proceed directly to the Panel hearing stage
Once the final details have been written and approved by both SMACNA and SMART, the MOU will be distributed to local unions and SMACNA chapters, along with additional guidance from the parent bodies.