Legal Definitions - check-off system

A check-off system is a payroll arrangement where an employer, with an employee's explicit authorization, automatically deducts specific amounts from the employee's regular wages and then transfers those funds directly to a designated third-party organization. In its most common legal application, this system refers specifically to the deduction of union membership dues from an employee's pay, which the employer then remits to the labor union.

Here are some examples illustrating the check-off system:

• Example 1: Hospital Nurses
  At a large urban hospital, many nurses are members of a professional nurses' union. When new nurses join the union, they sign a form authorizing the hospital's payroll department to deduct their monthly union dues directly from their paychecks. Each pay period, the hospital automatically subtracts the specified amount from the unionized nurses' salaries and sends the collected funds as a single payment to the nurses' union.

  This illustrates a check-off system because the employer (the hospital) is deducting union dues from employees' wages and remitting them to the union, all based on the employees' prior consent.

• Example 2: Construction Workers
  A construction company employs a crew of skilled tradespeople who are part of a local carpenters' union. As part of their collective bargaining agreement, the union has established a check-off system. Each week, the company's payroll processes the workers' wages, automatically withholding the agreed-upon union dues from the pay of all union members. The company then aggregates these deductions and electronically transfers the total amount to the carpenters' union treasury.

  This demonstrates a check-off system as the construction company (employer) is responsible for deducting the union dues from its employees' pay and forwarding them to the carpenters' union, streamlining the dues collection process for both the union and its members.

• Example 3: Public School Teachers
  In a particular school district, teachers are represented by a teachers' association, which functions as their union. When teachers elect to become members, they complete a payroll deduction authorization form. This form instructs the school district's finance office to deduct their annual membership dues in monthly installments from their paychecks. The school district then compiles these deductions and sends the total amount to the teachers' association each month.

  This is an example of a check-off system because the school district (employer) is deducting the teachers' union dues directly from their salaries and remitting these funds to the teachers' association, simplifying the payment of dues for its unionized employees.