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UPS Employees Approve New Labor Agreement with Substantial Pay Raises

UPS workers have successfully ratified a significant five-year labor agreement, endorsed by 86.3% of votes—the highest contract vote in the history of Teamsters at UPS, as confirmed by the union. The accord encompasses substantial wage hikes and improvements to work regulations and schedules.

The new deal sets a precedent for pay, benefits, and working conditions in the package delivery industry, with Teamsters General President Sean O’Brien emphasizing that it should serve as a model for worker compensation and protection across the nation.

This agreement was reached between UPS and the Teamsters Union, which represents around 340,000 workers at the company. The parties managed to avoid a potential strike that could have had a significant impact on the U.S. economy as the previous contract’s expiration on July 31 loomed.

Part-time employees will now receive a minimum of $21 per hour, up from the current minimum of $15.50. The issue of part-time pay was a focal point during negotiations. Full-time workers will see an average hourly rate of $49. Over the course of the five-year contract, current workers will receive an additional $2.75 per hour this year and a further $7.50 per hour.

CEO Carol Tomé shared that UPS drivers will average $170,000 in combined pay and benefits at the conclusion of the five-year agreement. However, the company has revised down its full-year revenue and margin projections due to the impact of labor negotiations and associated costs from the tentative agreement.

This development is part of a broader trend of labor organizations seeking improved compensation, schedules, and work regulations, driven by the aftermath of the Covid-19 pandemic and the current high inflation environment. Similar efforts have been seen with other major U.S. companies, including American Airlines, United Airlines, and Delta Air Lines, whose pilots have secured enhanced compensation packages.