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Macy’s Workers Win Back Pay in “Scan and Pay” App Case, Company Ordered to Restore Commission for In-Store App Sales

April 30, 2021

Union for 11,000 Macy’s Workers Across the Country Announces Victory in Case to Reverse Macy’s Pay Cuts from Mobile App Denying Commissions on Sales

WASHINGTON, DC – Today, the United Food and Commercial Workers International Union (UFCW), which represents 1.3 million workers in retail and other frontline industries – including over 11,000 Macy’s workers in Seattle, New York City, San Francisco, and other major cities, announced that UFCW won its case against Macy’s to force the company to end its practice of using its “Scan and Pay” mobile app to deny commissions to employees on in-store purchases. In the UFCW case, Macy’s was found to have violated the rights of New England workers represented by UFCW, and the company was ordered to provide back pay to all workers who lost commissions on in-store sales through the Macy’s app. 

Top retailers like WalmartTarget, and Kohl’s have similar apps as 51 percent of shoppers now use digital payment methods in stores. As a result, this ruling is likely to have major implications for Macy’s 125,000 employees and the 32 million American retail workers across the industry.

UFCW International President Marc Perrone: 

“Today’s victory for Macy’s workers sends a powerful message to CEOs across the industry that companies cannot use mobile apps to force a backdoor pay cut on workers. As the union for Macy’s workers across the country, UFCW is calling on the company to ensure that stores both in Massachusetts and nationwide follow this ruling and end the practice of using its Scan and Pay app to deny workers the commission they are entitled to for the service they provide. Macy’s is one of the largest retailers in the country and has a responsibility to invest in their workers who are essential to providing the high-quality service their customers deserve.” 

The case was led by UFCW Local 1445, which represents more than 12,000 New England workers, including Macy’s workers across Massachusetts in BostonBraintreeNatickPeabodyWarwickSaugus, and other cities.

UFCW Local 1445 President Fernando Lemus:

“Macy’s workers across Massachusetts have proudly served our communities for decades and this ruling makes clear that Macy’s cannot deny these hardworking men and women the pay they have earned. At Macy’s and companies across New England, UFCW Local 1445 will continue to stand up to protect the good-paying union jobs that are vital to our region’s economy.”

BACKGROUND

UFCW has been a leading national voice for essential workers in retail and other frontline industries, announced that the union won its arbitration case against Macy’s over the company’s Scan and Pay app which the company used to force a pay cut on workers, denying Macy’s associates any commission on sales completed through the app, even when workers assisted the customer with the sale.

UFCW filed its case against Macy’s over the Scan and Pay app in September 2018, soon after the company launched it in March 2018. UFCW’s case was heard by an independent arbitrator in December 2020. 

In its ruling on April 22, 2021, the independent arbitrator found that the Macy’s Scan and Pay app, by no longer requiring customers to complete their purchases at a cash register, bypassed the traditional method of identifying employees who should receive commissions on each sale. As a result, the arbitrator found that the use of the Macy’s app denied workers the commission they would otherwise have received had the sale been completed at a cash register.

Key findings of the independent arbitrator in the UFCW case against Macy’s include:

  • Macy’s Scan and Pay payment system bypassed the traditional point of sale register-based tracking of sales and commissions mechanism, thereby affecting and reducing the earnings of commissioned sales employees.
  • Macy’s, in effect, instituted an app that constituted a parallel, in-store point of sale, without regard to its effect on the compensation of certain commission employees.
  • Macy’s violated the collective bargaining agreements of all UFCW 1445 Macy’s employees by adopting a new in-store payment model that altered the parties’ practice with respect to accounting for and tracking, as well as earning commission credit for, in-store sales.  
  • Macy’s is now required to provide a monetary remedy to demonstrate that the new app violated the parties’ collective bargaining agreements by failing to recognize the disruption of the parties’ in-store point of sales practice and deal with the corresponding impact on sales associates’ commission compensation.
  • Effective immediately, all commissioned departments should be excluded from the app, meaning that products purchased from those departments must be rung up by an employee at a register. This will ensure that there are no further incidents of Macy’s using the Scan and Pay app to deny commissions that employees have earned. 

Click here to read the full ruling in the UFCW case against Macy’s.

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UFCW is the largest private sector union in the United States, representing 1.3 million professionals and their families in healthcare, grocery stores, meatpacking, food processing, retail shops and other industries. Our members serve our communities in all 50 states, Canada, Puerto Rico. Learn more about the UFCW at ufcw.org