Los Angeles Mayor Antonio Villaraigosa and leaders of the Coalition of L.A. City Unions, which represents about 19,000 city workers, announced the deal on Thursday.
It's going to save the city millions of dollars and give city employees who are part of it some job security and new contracts.
"While fighting may make headlines, it helps nobody make payday. It does not help anyone for ideology to surpass practicality, and today we have something that all Angelinos should be pleased with," said City Council President Eric Garcetti.
Los Angeles employee union agreement:
- City employees will pay more for retirement benefits and, for the first time, contribute to health benefits.
- In return, they agree to no cash overtime or salary increases.
- The city will end employee furlough days.
- More than 600 layoffs will be prevented.
- It aims at reducing a $500 million budget deficit next year.
Civilian workers now pay nothing toward retiree health benefits. Under the deal that must be ratified by unions, workers would contribute 2 percent of salary toward those costs beginning in April, increasing to 4 percent in July.
"On July 1, 2011, this contribution will increase to 4 percent, bringing the total employee retiree benefit contribution from the current 6 percent to 11 percent for all active and future coalition represented employee," said Villaraigosa.
The deal will save the city about $400 million over the three years of the contract, but it will only reduce next year's deficit by $69 million.
"Eventually, we came to a place, where furloughs will be ended, but the most important part there is services will be restored as a result of that," said Bob Schoonover, president of SEIU Local 721.
The tentative agreement must now be approved by the workers. It doesn't cover all city employees, just the union members who are part of the coalition.
The Associated Press contributed to this report.