PORTLAND, Ore. (AP) -- The State of Oregon reached a contract agreement with its largest employee union early Thursday, averting a potential strike that could have come as soon as Monday.
The two-year contract still must be approved by 19,000 rank-and-file members of the Service Employees International Union, likely later this month.
Negotiations were tense for a time. Dozens of workers rallied in front of the state Capitol on their lunch breaks several times this month, and union members voted to authorize a strike if the bargaining team felt it was necessary.
Union members were angered by the state's push to cap health care expenses, putting the burden for higher costs entirely on the workers. Instead, the contract would continue the existing arrangement in which employees cover 5 percent of health care premiums and the state pays the rest.
"We were able to achieve a health care agreement that maintains a 95-5 split on the premiums, which means that both the state and workers have an interest in keeping the cost down and making sure there's high-quality health care at a reasonable cost," said Heather Conroy, executive director of SEIU.
The contract would end some of the cash-saving concessions workers made during the recession. It would not include mandatory unpaid days off, known as furloughs, and would restore wage raises tied to experience, known as step increases. Workers would get a 1.5 percent inflation increase effective Dec. 1 and another 2 percent raise a year later.
The state would continue picking up workers' 6 percent retirement contribution to the Public Employees Retirement System.
The deal allows the state to stay within the $86.5 million increase in personnel costs that the Legislature included in the two-year budget that began July 1, said Matt Shelby, a spokesman for the Department of Administrative Services.
"Any time you can come to an agreement and stay within the box it's a good agreement," Shelby said.
Negotiations are continuing with the state's other unions. The American Federation of State, County and Municipal Employees is "trying to tie up loose ends," said Ken Allen, the union's executive director. He declined to talk about the sticking points, but said the union has not declared an impasse or taken steps toward a strike.
In a memo to state agency directors, state Chief Operating Officer Michael Jordan said his staff was working with the governor's office to decide on compensation options for managers and other employees not represented by unions.