KEY TAKEAWAY
The Presidential Emergency Board (PEB), a panel of arbitrators appointed by President Biden, released a set of recommendations in August 2022 that included massive wage increases, immediate lump sum payments for back pay and bonuses, and improvements to health benefits for rail workers. As in any good compromise, neither side got everything it wanted.
However, the recommendations reflect an agreement that PEB felt was fair to all parties and that all union leaders and rail management accepted. On December 1, 2022, the Senate voted to implement the tentative agreements based on the PEB framework to avert a devastating railroad shutdown.
The Senate voted on an overwhelmingly bipartisan basis to avert a rail strike and implement tentative agreements reached between railroads and workers. Over the course of the contract, average railroaders will receive a $16,000 immediate payout and increase wages and benefits to $160,000 per year.
“The Senate acted with leadership and urgency with today’s vote to avert an economically devastating rail work stoppage,” said AAR President and CEO Ian Jefferies. “As we close out this long, challenging process, none of the parties achieved everything they advocated for. The product of these agreements is a compromise by nature, but the result is one of substantial gains for rail employees. More broadly, all rail stakeholders and the economy writ large now have certainty about the path forward.
“Let’s be clear railroading is tough, essential work that keeps our nation moving, and our employees deserve our gratitude for moving America’s freight and doing so safely every day. The gains in this agreement are significant, including historic wage increases, best-in-class healthcare, and meaningful progress in creating more predictable, scheduled work shifts. Without a doubt, there is more to be done to further address our employees’ work-life balance concerns, but it is clear this agreement maintains rail’s place among the best jobs in our nation.”
Increases compensation substantially.
- The average compensation of rail workers involved in the current round of negotiations ranks within the top 10% of all industries, with an average total compensation of more than $126,000 in 2020.
- The tentative agreements will provide employees with a 14.1% wage increase effective immediately and a 24% wage increase by 2024.
- Estimates show that by the end of the agreement, the average rail worker’s total compensation will reach about $160,000 per year.
- The tentative agreements will also provide about $16,000, on average, in immediate payouts.
Improves best-in-class healthcare.
- The industry’s benefits plan ranks in the highest category — the Platinum-level status — as defined by the Affordable Care Act.
- Employees will maintain platinum healthcare, ranked among the nation’s best plans, with some enhanced benefits. Additionally, employee contributions are set at 15% per month.
- The benefits offered to the unionized railroad workforce in 2023 through the nationally bargained health, and welfare plans will, by any available measure, have significantly lower member cost-sharing than benchmark data.
Addresses time off and scheduling policies.
- The average unionized Class I freight rail employee currently receives three weeks of paid vacation and up to 14 days for personal leave. More senior employees receive up to seven weeks of paid vacation. Some rail employees receive paid sick leave, while others have access to supplemental paid sick leave, extending up to 52 weeks.
- The tentative agreement provides an additional personal leave day for all employees, addresses several scheduling and related matters for operating crafts, and adjusts travel and away-from-home expense reimbursement provisions for track maintenance employees.