The U.S. Supreme Court ruled that mandatory union dues for representation were not constitutional. The administration is proposing another rule that would make it more difficult for individuals to pay dues, even if they want to contribute. Currently, those interested in contributing would deduct the dues amount from their periodic pay and be credited to their union’s account. But now that arrangement is being threatened:
In July, the Trump Administration’s Centers for Medicare and Medicaid Services issued a proposed rule restricting states’ ability to send money from Medicaid to “third parties.” Because Medicaid funds the salaries of home health aides, the agency said the rule could shut down the ability of states (who employ home health aides) to deduct about $70 million in annual dues from union members’ paychecks. In a statement, the agency’s acting Medicaid head, Tim Hill, said the proposed change “is intended to ensure that providers receive their complete payment” from Medicaid.
Prepaid cards to the rescue. The proposed solution to the loss of dues anticipated by the Service Employees International Union and other unions is to direct total payroll to a prepaid payroll card, then have recurring transactions direct funds to the union coffers:
…to ensure the union keeps receiving member dues without requiring workers to write a check every month, the union is rolling out the aforementioned debit cards. Workers can authorize ADP to deposit their state paychecks onto the card so as to route their dues to SEIU. The union said the cards, which can also be used to store government benefits, pay bills and cash checks, will serve a useful purpose for members who lack bank accounts.
**ADP has a responsibility to provide all of our clients with the innovative solutions they need to meet their business challenges. Our top priority is responding to the needs of our clients’ and their employees, while remaining compliant with all applicable laws and regulations. Additionally, all voluntary deductions from pay must be authorized by the employee.
Overview by Sarah Grotta, Director, Debit and Alternative Products Advisory Service at Mercator Advisory Group
