Regional Retail is a local retail outlet that employs 50 people and has an annual payroll of $1,500,000. The retail outlet is part of a regional union. Regional Retail has 2 bargaining units, which have a total of 28 people. The positions that are represented by the union include janitorial and clerks. 22 employees are not in the union. These positions include office staff, managers, marketing and sales staff. The distribution of payroll is $640,000 for the union employees and $860,000 for the nonunion employees. Current benefits for the union employees include 7 paid holidays; 2 weeks paid vacation, health insurance and 2% of annual salary contributed to a retirement fund. The employee premiums for health insurance are $150 a month for family plan and $85 a month for single plan. The union employees also contribute $75 per month for union dues. Benefits for the nonunion employees include 6 paid holidays, 3 weeks paid vacation, health and dental insurance, and 2% of annual salary contributed to a retirement fund. Employee premiums for health and dental insurance are $180 a month for a family plan and $95 per month for a single plan. The union contract comes up for negotiation this year. The current contract is a 2 year contract. Management has determined that there is $100,000 available for any increases, including wages and benefits. Health insurance is estimated to increase $25,000, which is part of the $100,000 that is available. The nonunion employee premiums will increase by 4%. This will generate an additional $3600 from premiums to help offset some of the $25,000 increase. Annual insurance costs are $250,000, so the costs for insurance are going up 10%.

Currently, the contributions from all union employees in premiums are $37,000 per year. The union has indicated it will try to negotiate a 0% increase in employee premiums, while management would like these premiums to also increase 4%, same as nonunion employees. Management would like to provide a 3% wage increase to nonunion employees, but has not yet determined this due to negotiations.

If you are responsible for negotiating the union contract, and knowing what is available for all employees, what recommendations would you make for both union and nonunion employees? Keep in mind, negotiations can include more than is what is indicated. Other types of perks or benefits could also be included.