Illinois anti-union move unconstitutional: AFL-CIO

Illinois gov's swipe at public employee unions
Illinois gov's swipe at public employee unions   

The move by Illinois Gov. Bruce Rauner to eliminate union dues is "unconstitutional," AFL-CIO President Richard Trumka told CNBC on Tuesday.

On Monday, Rauner announced an executive order eliminating dues for some state employees who do not want to pay to support union activities.

"He's saying he wants to have people that don't pay for the services they get," Trumka said in an interview with "Closing Bell."

"They get a collective bargaining agreement and all the benefits under it and he says they don't have to pay for it. What he's doing is actually unconstitutional."

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The governor based his decision on a U.S. Supreme Court decision that found Illinois law violated the First Amendment by forcing home health-care aides to involuntarily pay union fees.

Trumka likened it to citizens paying taxes even though they may not agree with what Rauner is doing.

"I'm a taxpayer in Illinois. He's doing stuff to lower my wages and I don't want my wages lowered. Should I be able to withhold my taxes from him? Isn't that my First Amendment right as well?"

Rauner's officer did not immediately respond to a request for comment from CNBC.

CEO-worker pay gap

CEO-worker pay gap matters to investors: AFL-CIO
CEO-worker pay gap matters to investors: AFL-CIO   

Trumka is also taking issue with the big pay gap between chief executives and their workers.

Top CEOs can rake in millions, but when the disparity between their compensation and their employees' pay is too great, investors need to know about it, he said.

That's because it would mean the company is probably poorly run, and investors need that information to make decisions, he explained.

"Moody's Investors Service says that when there is an excessive pay, that means you have a weak board and bad decision-making."

In addition, a large pay gap leads to bad morale and high turnover, he said. Trumka penned an op-ed on the issue in Monday's New York Times.

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While the CEO-worker ratio was included as a provision in the Dodd-Frank financial reform act, the debate over the issue has caused it to be delayed.

However, Trumka said anyone who has said calculating that ratio is too complicated or costly to implement is only using that argument as subterfuge to get away from the task.

Making the pay gap public will also act as an antiseptic, bringing companies more in line with where they should be, he said.

—Reuters contributed to this report.