Which labor arrangement describes payment of dues but not mandatory union membership?

• A. Closed shop
• B. Union shop
• C. Agency shop
• D. Open shop

Answer: (C)

This question tests how different labor arrangements handle dues and union membership. The arrangement described—employees paying a fee to cover the union’s bargaining and administration costs but not being required to join the union—is agency shop. It ensures workers share the costs of representation without forcing membership.

In a closed shop, you must be a union member to be hired. In a union shop, you must join the union after being hired. In an open shop, you can work without joining the union and without paying dues. Agency shop sits between these models by requiring dues (or an equivalent agency fee) for representation, while letting individual workers choose whether to join the union.