As the calendar has turned to 2026, two issues of major importance to public sector employers, including cities, villages, school districts, etc., are ripe for an update.
CPI-U
The Wisconsin Employment Relations Commission has released CPI-U figures that will be applicable to public sector collective bargaining agreements in 2026. For both June 1 and July 1, 2026, WERC’s CPI-U amount is 2.63%. This is down slightly from WERC’s figure for April 1, 2026, which was set at 2.70%.
What does this mean? Since Act 10 went into effect in 2011, public sector employers may bargain with certified labor organizations for base wage increases, with any such bargained increase being capped at the applicable CPI-U figure issued by the WERC. Accordingly, if, for example, a school district’s collectively bargained agreement with a certified teacher’s union limit is set to expire on June 30, 2026, the district and the union can bargain over an increase to members’ base wages effective July 1, 2026, but such an increase is capped at 2.63% of the prior year’s compensation levels.
Several things are important to remember here. First, this law does not apply to public safety and transit employees, as those categories of employees are statutorily defined. Second, this only applies to bargaining with a certified bargaining unit, which may be comprised of professional/certified staff (e.g., teachers) or non-management support personnel (e.g., assistants, custodians, public works employees, etc.). Third, an employer may issue non-base wage pay increases that result in a total compensation increase in excess of the CPI-U figure, but any decision to do so must be made unilaterally by the employer and cannot, by law, be bargained by either side. Fourth, the CPI-U figure is a maximum total base wage increase, but a public sector employer has no obligation to agree to an increase at the WERC-set CPI-U figure.
In light of these limitations, many public sector employers consider alternative compensation increases and packages, which are designed to both fit within fiscal constraints while also ensuring that employees are appropriately compensated. If you have any questions about any such possible alternatives, you should contact legal counsel.
Act 10 Litigation
As we reported in 2025, the constitutionality of 2011 Wisconsin Acts 10 and 32 (Act 10), and whether Wisconsin will revert to pre-Act 10 traditional collective bargaining between unions and municipalities, is at issue in Abbotsford Education Association v. Wisconsin Employment Relations Commission. To briefly summarize, in 2023, the Abbotsford Education Association and several other public sector unions and union members filed suit against the WERC, advancing the latest in a long line of arguments as to why Act 10 was unconstitutional. On July 3, 2024, Dane County Circuit Judge Frost issued a decision in which he agreed with the plaintiffs and found Act 10 arbitrary and in violation of the Equal Protection Clause of the Wisconsin Constitution.
Not surprisingly, WERC appealed Judge Frost’s decision, and after the Wisconsin Supreme Court declined an invitation to take the case immediately (as opposed to hearing it after the Wisconsin Court of Appeals decided the pertinent issues), the appeal progressed. Through 2025, the parties to the case and several amicus parties (individuals or entities who are not parties to the case but have interests impacted by it) have filed more than ten briefs with the Wisconsin Court of Appeals, the last of which was filed on July 8 of last year. The entire matter was submitted to the appellate panel on October 28, 2025, and all are awaiting the Court of Appeals’ decision.
We cannot accurately predict how the Court of Appeals will rule on the issues, and regardless of the ruling, it is likely that the unsuccessful party will seek review from the Wisconsin Supreme Court. As such, it is unlikely that the parties will receive a final decision in 2026. While appeal proceedings are pending, it is important for all public sector employers to continue abiding by the Municipal Employment Relations Act for purposes of collective bargaining, elections, and employee rights to engage in protected, concerted activities.
We will continue to monitor the case and issue updates as they become available.
