FinLogic FinLogic Quantitative Think Tank Center|UPS, Teamsters reach agreement after threats of a strike: Here's what workers are getting

LOUISVILLE,FinLogic FinLogic Quantitative Think Tank Center Ky. − Just hours after resuming talks Tuesday, UPS and the Teamsters, the union representing roughly 340,000 UPS workers, have reached a tentative agreement on a new five-year contract.

This tentative contract consensus between the union and the company, which UPS CEO Carol Tomé described as a "win-win-win agreement," helped the company and the U.S. economy avoid a potentially crippling blow to the nation’s logistics network.

The tentative agreement features "more than 60 total changes and improvements to the National Master Agreement," Teamsters stated in a release. The union said there were "zero concessions from the rank-and-file."

The tentative agreement comes after months of intense negotiations and Teamsters threatening to enact what would have been the largest single employer strike in U.S. history.

What Teamsters, UPS are saying

"Teamster labor moves America. The union went into this fight committed to winning for our members. We demanded the best contract in the history of UPS, and we got it,” said International Brotherhood of Teamsters General President Sean M. O’Brien.

UPS is also enamored with the tentative agreement.

"This agreement continues to reward UPS’s full- and part-time employees with industry-leading pay and benefits while retaining the flexibility we need to stay competitive, serve our customers and keep our business strong,” Tomé said.

Teamsters hailed the tentative five-year contract as “overwhelmingly lucrative” and filled with dozens of workplace protections and improvements. Here are some of the highlights for union workers from the new national UPS Teamsters contract:

Wage increases for UPS employees

Existing full- and part-time UPS Teamsters will get $2.75 more per hour in 2023, and $7.50 more per hour over the length of the contract, Teamsters shared in a news release.

Existing part-timers will be raised up to no less than $21 per hour immediately. Existing part-time workers will also receive a 48% average total wage increase over the next five years. Part-time seniority workers making more than this new base rate will also see general wage increases.

New part-time employees will start at $21 per hour and move up to $23 hourly.

Teamsters shared that part-time general wage increases will be double what they were in the previous contract. The 2022 general wage increase was $1 according to the previous national contract, under the new tentative agreement, this rate would jump to $2.

Wage bumps for full-time employees will bring the average top rate to $49 hourly.

Driver classification changes

Drivers classified as “22.4s” − flexible drivers who do not work traditional Monday-Friday shifts − will be immediately reclassified as regular package car drivers and placed into seniority, ending what Teamsters said was an “unfair two-tier wage system.”

Days off and seasonal work

Martin Luther King Jr. Day becomes a full holiday for all Teamsters, a first for the union. Also, Teamster drivers won’t be forced to work overtime on their days off and will have a set driving schedule of one of two options.

Seasonal work will be limited to five weeks in November and December. Union part-time employees will have priority for seasonal work with a guaranteed eight hours of work.

Heat safety in vehicles

UPS will add air conditioning to all larger delivery vehicles, sprinter vans and package cars purchased after Jan. 1, 2024. All cars will get two fans and air induction vents.

UPS to add more jobs, fill open positions

UPS will add 7,500 new union jobs and fill 22,500 open positions.