House Committee on Education and Labor
U.S. House of Representatives

Republicans
Rep. Howard P. “Buck” McKeon
Ranking Member

Fiscally responsible reforms for students, workers and retirees.

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Fact Sheet

FOR IMMEDIATE RELEASE
June 8, 2009

CONTACT: Alexa Marrero
(202) 225-4527

Bill Summary: Rewarding Achievement and Incentivizing Successful Employees – the RAISE Act

In too many ways, federal labor law (which was largely enacted in the early to mid-20th century) fails to address the reality of the 21st century workplace. For example, in a unionized workforce, an employer is hamstrung in its ability to reward high-achieving employees through higher pay, bonuses, or other compensation. 

All terms and conditions of pay (including raises and bonuses) are dictated by the terms of a collective bargaining agreement, which may prevent an employer from rewarding a high-achieving employee. Even where a contract does not expressly prohibit such compensation, decades-old federal labor law itself may limit or prohibit an employer from rewarding high-performing employees.

The “Rewarding Achievement and Incentivizing Successful Employees” or “RAISE” Act is a straightforward, common-sense solution to this problem. The “RAISE Act” simply allows employers to reward high-achieving employees through raises, bonuses, or other compensation, notwithstanding any limitation in the collective bargaining agreement or otherwise under federal labor law. Under the “RAISE Act,” an employer can reward high-performing employees without fear of running afoul of the limitations in a collective bargaining agreement, or of industrial-era labor laws. Put more simply, the “RAISE Act” lifts the “pay cap” on the 8.6 million hard-working Americans in union workforces.

Importantly, the “RAISE Act” maintains the current-law prohibition on discrimination in pay based on support or opposition to a union – thus, under the “RAISE Act,” and employer could not simply reward employees who do not support the union (or punish or discriminate against employees who support the union).

The “RAISE Act” would allow employees to get ahead through their own hard work. The typical union member would earn between $2,600 and $4,300 a year more if employers could give merit raises. This puts more money into workers’ pockets and gives employers the freedom to reward and incentivize high-achieving employees that help build and expand their businesses.

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