CenturyLink (NYSE: CTL) has overcome a hurdle in its labor negotiations with union workers by establishing a tentative agreement with workers represented by the Communications Workers of America (CWA) in its Northern and Central Florida regions.
Among the many new elements of the tentative agreement are a series of pay and pension increases.
The service provider agreed to provide a 2 percent retroactive pay increase effective as of April 1, 2015, and a 2 percent raise for 2016. It is also providing a one-time $1,200 ratification bonus for each employee on the active payroll as of the date of the contract ratification.
From a pension perspective, the service provider will provide an increase in 2015 and 2016, but no increase in the third year of the proposed contract. Workers that are eligible for pension also have the option to get a lump sum payout.
Following its ILEC counterparts AT&T (NYSE: T) and Verizon (NYSE: VZ), pension is not available for new employees. Any employee that is rehired by the company will have their pension frozen at that time and will go to the 401k plan.
CenturyLink is just one of a number of large telcos that are in the process of completing or moving through negotiations with the CWA and International Brotherhood of Electrical Workers (IBEW) unions--a process that is often contentious. Verizon recently adopted a contingency plan if 38,000 of its union workers represented by the CWA and the IBEW decided to strike. Meanwhile, the CWA union voted to ratify a three-year agreement covering 12,000 AT&T employees in the Midwest.
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