What is a union shop?

A union shop is an organization that requires all employees to join a union once they’re hired. Being a member of a union means employees must pay dues throughout their employment with the company. Union shops aren’t allowed in “right-to-work” states. These states allow employees to voluntarily join unions and don’t let employers require their team members to join them. The remaining states require employees to join a union and pay dues once they’re hired.

Unions collect member fees to fund employee benefits, like health insurance, campaign contributions and political lobbying. When an employee pays dues, the union represents them and protects their rights as an employee. As an employer, it’s important to maintain a positive relationship with your industry’s union to ensure you’re properly updated on and are following the employee rights contract guidelines the unions lay out.

Related: What is a Cooperative? An Introduction

Pros and cons of union shops

While unions offer positive benefits for both team members and their employers, they can sometimes negatively impact an organization’s structure and productivity. Pros and cons of union shops are:

Pros

Common advantages of union shops include:

• Protects workers from unnecessary terminations:Most unions prevent employees from receiving unnecessary terminations, which means you need a clear purpose for letting an employee go. You’re able to administer layoffs only if they follow the guidelines laid out in the union contract. This contract may also cover when employees are entitled to certain promotions.
• Provides workers with strong wages and benefits:Labor unions handle the bargaining and salary negotiations for employees, helping them receive healthy salaries and benefits, like affordable and impressive health care packages. Employees may be more eager to join your company if it collaborates with a union that guarantees they’ll receive a salary that pays them what they’re worth.
• Offers stable and trained employees:Most unions implement training programs for their specific industry to enhance an employee’s skill set and expertise. This is especially common in manufacturing and hard labor industries, as the union provides safety training, which ensures a safer environment and relieves your company of the burden of building these training materials for employees.

Cons

Common disadvantages of union shops include:

• Causes employees to feel unmotivated:While unions guarantee their employees raises and promotions, these are typically administered according to seniority rather than as performance-based raises or promotions. This often makes it more challenging to motivate employees to submit quality work or improve their skill set through compensation.
• Upsets employees who don’t want to pay fees:Union shops require employees to join unions and pay fees, even if they don’t want to join. Employees may see this as an unfair system and may pursue a different position where union fees are voluntary, rather than required.
• Increases difficulties of promoting employees:Since unions focus more on promoting employees with seniority, it’s more challenging to promote people based on their performance, which causes employees to work for organizations that value their impressive work performance rather than their age or how long they’ve worked at the company.