By Ed O'Keefe
Monday, March 14, 2011; 5:55 PM
The U.S. Postal Service and one of its largest labor unions have reached agreement on a new 41/2-year contract that would give raises to about 205,000 workers but force them to pay more for their health insurance.
The tentative deal with the American Postal Workers Union would provide workers with a 31/2 percent pay increase over the life of the contract, starting with a 1 percent raise in November 2012, the union said Monday. Postal clerks, mechanics, truck drivers and maintenance staff will vote in coming weeks on the contract, which would run through May 2015.
The deal is "a responsible agreement that is in the best interest of our employees, our customers and the future of the Postal Service," Postmaster General Patrick R. Donahoe said in a statement.
APWU President Cliff Guffey said it would protect jobs and strengthen the cash-strapped agency. "The Postal Service's desperate financial situation made these negotiations especially hard," he said, but the new deal "will enable the USPS and its employees to get past these difficult days."
The accord follows months of negotiations between the Postal Service and APWU. The agency continues to talk with another union, the National Rural Letter Carriers' Association, over that contract, according to a USPS spokesman.
The agreement prohibits layoffs of career employees who were hired before the current contract expired in November, but it leaves the door open to layoffs of newer workers. Some work outsourced or assigned to managerial personnel in recent years will be reassigned to APWU members, the union said.
And in a key concession for workers, the Postal Service will have to limit its use of "excessing" - the reassignment of postal workers from one city to another. According to the new deal, postal workers may be reassigned only to a location no farther than 40 to 50 miles from their current assignment. That restriction should make the potential burden of reassignments easier, Guffey said, adding that some workers had to uproot families and move to keep their jobs.
By 2016, the Postal Service will contribute 76 percent of a postal worker's health premiums, down from 79 percent. Most federal agencies cover about 72 percent of employee health premiums.
The Postal Service expects to lose about $7 billion this year because of declining mail volume and about $5.4 billion in payments it must make to prefund future retiree health benefits. The agency employs about 583,000 workers.
It is working to cut its ranks through attrition, and postal officials are expected next week to detail plans to eliminate about 7,500 administrative and management positions. They may also consider offering early-retirement incentives to other employees.