Preparation

Costing out the CBA

It is important to understand the total cost of a contract. This means that the cost of wages, health care insurance, sick leave, uniforms etc. all must be added up so that both sides have a basic understanding of what a single employee costs the employer under the proposed CBA (contract). 

If both parties do not agree at the start of bargaining what the total costs are for the current contract, it will be difficult for them to begin bargaining for the new contract.

Cost out for a Single Employee

It is important to understand the total cost of a contract. This means that the cost of wages, health care insurance, sick leave, uniforms etc. all must be added up so that both sides have a basic understanding of what a single employee costs the employer under the proposed CBA (contract). 

If both parties do not agree at the start of bargaining what the total costs are for the current contract, it will be difficult for them to begin bargaining for the new contract.

How much does one employee cost the employer? For example:

1. Wage: $15.00 per hour x 2080 (40 hours x 52 weeks) = $31,2002.

2. Vacation Pay: 7 vacation days x 8 hours x $15.00/hour = $8403.

3. Holiday Pay: 12 days x 8 hours x $15.00/hour = $1,4404.

4. Health Insurance: $1,500 per month x 12 months = $18,0005.

5. Pension: Annual Wage x 5% = $1,5606.

6. Uniform: $100.00 per year = $100.

The total labor cost for a single employee = $53,140.

Total Cost for the Employer

To calculate the total labor cost for an employer, you would take the cost for a single employee and multiply that by total the number of employees.

In the example above, if the employer had 30 employees who received the same wages and benefits, the total labor cost for the employer would be $1,594,200. 

It is easiest to calculate the total labor cost for an employer using a spreadsheet that will make the calculations for you. As money proposals change from meeting to meeting, maintaining a spreadsheet will save both sides a substantial amount of time and headache.

Click here to see an example. 

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