Two-tier system

From Wikipedia, the free encyclopedia

The two-tier system, in the context of labor relations, is a type of contract employed by companies to scale back negotiated wages and/or benefits. When a two-tier system is in place in a new contract, workers hired before ratification of that contract have a wage progression table (or benefits) different from those hired after ratification. Allegedly, companies whose industries experience downturn in the market re-adjust wages to the new realities of the market without affecting workers with seniority. Critics argue this system creates a second-class of workers and causes high turnover.