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Question: The terms of the last collective agreement provided wage and benefits have resulted in costs in the final year of the contract of: Average Hourly Wage Rate:               $30.00 Wage Impacted Benefits:               $ 4.50 Non-Wage Impacted Benefits:           $ 3.00               Total Compensation Rate:               $37.50 These numbers will be used as the base year for future calculations. Union Proposals 2. Jim will need to calculate the impact of the safety boot and pension proposal on the non-wage impacted benefit calculation in the first year of the new agreement. He will assume each employee works a 40-hour week, 52 weeks per year. Calculate the new non-wage impacted benefit (NWIB that would result from accepting the union’s proposals)? (5 marks) Add new: Pension Plan Company Contribution of $500,000 in the first year of the new collective agreement. Add new: Safety Boots Requirement, Company Paid, $50.00 per year per employee.

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The terms of the last collective agreement provided wage and benefits have resulted in costs in the final year of the contract of:
Average Hourly Wage Rate:               $30.00
Wage Impacted Benefits:               $ 4.50
Non-Wage Impacted Benefits:           $ 3.00              
Total Compensation Rate:               $37.50
These numbers will be used as the base year for future calculations.

Union Proposals

2. Jim will need to calculate the impact of the safety boot and pension proposal on the non-wage impacted benefit calculation in the first year of the new agreement. He will assume each employee works a 40-hour week, 52 weeks per year. Calculate the new non-wage impacted benefit (NWIB that would result from accepting the union’s proposals)? (5 marks)
Add new: Pension Plan Company Contribution of $500,000 in the first year of the new collective agreement.
Add new: Safety Boots Requirement, Company Paid, $50.00 per year per employee.

Explanation / Answer

Number of hours per year per employee = 40*52 = 2080 hours

Safety boot requirements = $ 50 per year per employee = 50 / 2080 = 0.024 addition to NWIB per hour per employee

Pension plan contribution = 500000 / 2080 / Number of employees . number of employees is not provided in the question.

New NWIB = 3 + 0.024 + pension plan contribution .

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