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Tech Gets Macy’s in a Pickle

Macy’s will soon be compelled to fork over sales commissions for workers dating back to 2018.

On April 22, the United Food and Commercial Workers International Union (UFCW)—which represents 1.3 million U.S. retail workers, including 11,000 Macy’s employees—declared victory over the department store chain in a case stemming from its use of an in-store “Scan and Pay” mobile app, which allows shoppers to check out on the store floor rather than bringing their prospective purchases to a register. By bypassing the traditional sales process, Macy’s point-of-sale system could no longer recognize the employees who were making the sales, effectively denying them a shot at wage-boosting commissions and blunting their earning potential, according to the UFCW.

Independent arbitrator Tammy Brynie, Esq. found that Macy’s violated the rights of workers, and the company has been ordered to compensate them for lost commissions. UFCW first launched its case, initiated by UFCW Local 1445, the union’s New England chapter, against the retailer shortly after the app was launched in Macy’s stores in 2018, and the case was heard by the arbitrator in December of last year.

“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,” Brynie wrote in her decision and award memo last month. The move violated the collective bargaining agreements of Macy’s employees by adopting a new system that altered the “accounting for and tracking” of in-store sales, she added.

Now Macy’s will have to “provide a monetary remedy” to employees across Massachusetts and Rhode Island. What’s more, Brynie wrote, “to the extent that the Employer continues to utilize the Scan and Pay app, all commissioned departments should be excluded from the app,” meaning that products purchased from those categories must be rung up by employees at a register.

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Macy’s is not unique in its adoption of digital payment methods—especially amid the pandemic. UFCW noted that big-box retailers and department stores like Walmart, Target, and Kohl’s employ similar tech tools.

“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,” UFCW international president Marc Perrone said Friday. “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.”

UFCW Local 1445 president Fernando Lemus added that the 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,” he added.