About 8,000 local UPS workers soon will get back pay worth millions of dollars as part of a long-delayed contract ratification.
The employees are covered by a national Teamster contract for about 250,000 workers, including 7,000 part-time package handlers at Worldport and another 1,000 at Centennial and Bluegrass ground hubs in Louisville.
The new five-year contract, on which Teamsters initially voted in October, calls for wage increases of $4.15 per hour for full- and part-time workers over the term of the contract. It also boosts starting pay to $13 per hour, up $2.50, and continues to provide health insurance without workers having to pay premiums.
Pay increases are retroactive to Aug. 1, meaning workers are owed back pay for about nine months. A spokeswoman for the International Brotherhood of Teamsters told Insider via email that “the amounts will be calculated by the company” and will depend on each worker’s wages and hours.
A UPS spokesman told Insider via email that pay will vary from worker to worker and that the company expects to send lump-sum checks in six to eight weeks. New pay rates will be reflected on pay checks as of Friday. Additional raises will go in effect on Aug. 1.
A union member who works 20 hours per week and gets a $2.50 hourly pay bump would get back pay of $1,800 before taxes. A package handler who works 40 hours per week and gets a 70-cent hourly raise would get a lump sum of $1,008 pre-tax.
Local 89, which represents Louisville workers, could not be reached.
Worker attraction and retention are becoming more difficult for many businesses because of the tight labor market. UPS is dealing with that at the same time it is increasing capacity in response to growing demand, fueled in part by the still rising popularity of e-commerce.
UPS said in its first-quarter report that the average daily volume for air products in its domestic segment grew nearly 8% from a year earlier, “driven by high demand for faster delivery options.”
Although UPS package handlers in October rejected the contract proposal, national leaders of the Teamsters union said its constitution requires them to ratify the agreement.
The International Brotherhood of Teamsters had said that 54.2% of package handlers cast ballots against the proposal. However, it said union rules require that the proposal must be ratified if less than half of eligible voters cast ballots and less than two-thirds of voters reject it. Only 44.3% of the eligible 209,043 members participated.
Many union members, including some from Local 89, which rejected both the national and locally negotiated agreements, disagreed with the IBT’s interpretation of the rules.
And Fred Zuckerman, president of Local 89, who has ambitions for national union leadership, had said the $13 starting wage is at least $2 too low and would assure that the logistics giant would continue to lose workers to other local employers who pay more.
Despite the IBT’s interpretation of the vote, the new national contract could not be implemented until a few days ago, after workers in Michigan had ratified the last outstanding supplemental agreement.
UPS spokesman Mike Mangeot told Insider via email Tuesday that while operations at UPS have continued as normal since the initial vote, the company was “pleased that the contract has been fully ratified.”
Mangeot said UPS’ “overriding goal during the contract negotiation has been to reward the company’s employees for their contributions to its success, while simultaneously enabling the business to remain flexible to meet customer needs.”
Denis Taylor, co-chair of the National Negotiating Committee and director of the Teamsters Package Division, said in a news release that the contract “recognizes our members’ hard work by providing solid wage increases, protecting their health coverage, improving their retirement security and giving part-time workers the chance to advance into long-term careers.”
The union said that the contract also requires UPS to create 5,000 new full-time jobs.