LOUISVILLE, Ky. (WDRB) – More than a month after UPS finalized a five-year labor contract with the Teamsters union, about 250,000 workers nationwide – including thousands in Louisville – are still waiting on checks for retroactive raises promised by labor deal.
A UPS spokesman said the back pay will be issued in the company’s first pay period in July, which is about nine or ten weeks following the contract’s implementation on April 29.
In 2014, the last time UPS and the Teamsters renewed their contract, it took only five weeks for the Atlanta-based shipping giant to make the payments after the contract was finalized.
UPS says the delay in cutting the so-called “retro checks” is solely for technical reasons. But the company is also having trouble retaining workers amid historically low unemployment.
Workers who don’t want to lose potentially hundreds or thousands of dollars in retroactive pay have to stay with UPS until the payments are made, or else they have no guarantee they’ll get the money.
“A lot of these younger kids are going to get a pretty good size retro check and I think they are holding this money hostage,” said Paul Brown, a 29-year employee who loads and unloads aircraft at UPS’ Worldport global air hub at Louisville Muhammad Ali International Airport.
Brown was referring to entry-level package handlers, who got a raise from $10.50 per hour to $13 as part of the contract.
Teamsters actually rejected the contract in a national vote last fall, but the union declared it ratified, citing a rule that allows contracts to move forward – despite a ‘No’ vote – when less than half of eligible members cast ballots.
Then, UPS and local Teamsters unions spent months hammering out regional and local side agreements. The national contract finally went into effect April 29 when all of the smaller deals were reached.
The raises in the five-year contract are retroactive to Aug. 1, 2018. That means, for example, a worker who was paid $10.50 per hour is owed a retroactive payment of $2.50 for every hour worked since Aug. 1, plus more for overtime and double-time hours during UPS’ hectic peak season in November and December.
UPS spokesman Steve Gaut said the shipping giant has an additional 54,000 employees who are owed retro checks compared to last contract renewal in 2014.
“This retro-payment covers all employees under the entire national master agreement, so more than 250,000 employees with well over 150 operating days involved,” Gaut told WDRB in an emailed statement. “It is far more than a simple update to a single payroll system.”
The calculation of retro pay even involves “manual adjustments” by UPS staff to ensure accuracy when, for example, “a given employee works multiple jobs with different pay rates and / or pay progressions in the same day,” Gaut said.
“In these instances, the proper rate and retro amount for each job performed must to be validated and input into the system,” he said.
Asked whether the company is using the retro payments as an incentive to retain workers, Gaut said: “We are working to provide the retroactive payment as accurately and quickly as possible.” He added that the company “understands the importance” of the back pay to its workforce.
As for employees who leave UPS before the retro payments are made, Gaut could not say whether they will receive the money.
“It is dependent on the situation and we will not offer a universal statement with respect to employees’ eligibility for retroactive pay,” he said.
When WDRB first highlighted the issue in April, a labor lawyer who was not involved in the situation said an employer like UPS would not legally owe retroactive raises to employees who aren’t on board at the time a contract is finalized.
Meanwhile, UPS continues to offer weekly bonuses of $100 to $150 to keep workers on the job at its Louisville air hub, and in recent weeks, the company has forced some Monday-Friday workers to work on the Sunday package sort at Worldport because of shortages. The company is also paying a $50 bonus to Sunday workers at the air hub.
In a statement issued this week, Kara Deniz, a spokeswoman for the Washington, D.C. -based International Brotherhood of Teamsters, indicated the union doesn’t take issue with UPS’ timeline for the retro pay.
“It is not necessarily unexpected for it to have taken some time since this is a big undertaking -- this was the richest contract in our history of about $660 million and there are over 200,000 manual calculations that UPS needs to make to ensure accuracy,” Deniz said. “UPS is keeping us informed in order to make this happen as quickly as possible.”
Teamsters Local 89 in Louisville, whose leaders are often at odds with the union’s national leadership, has no control over the timing of the retroactive pay, said spokesman Stephen Piercey.
Piercey said some workers are not happy that the payments will not be made within the 6-8 weeks that he said UPS and the union projected when the contract was ratified in April.
“Anytime people don’t get their money on time, it’s something they are upset about,” he said.