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Adams and Largest Municipal Union Reach Tentative Agreement, With 16.21% Raises Through 2026

The mayor and the union representing more than 100,000 public sector workers also agreed to a pilot program on remote work. The deal stands to set the pattern at City Hall for more union contracts to come.

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Mayor Eric Adams and DC 37 director Henry Garrido announce at City Hall a labor agreement for the city worker union.

Ed Reed/Mayoral Photography Office

Mayor Eric Adams and the city’s largest municipal workers’ union, District Council 37, struck a tentative five-year contract agreement Thursday, one that stands to set a pattern for renewing a slew of expired agreements with other unions.

The deal, which still needs to be ratified by the union’s approximately 100,000 members, guarantees 16.21% in wage increases by 2026. According to DC37 Executive Director Henry Garrido, it will include a trial run for remote work and flexible hours — pandemic-era arrangements that many union members were eager to preserve.

The agreement runs retroactive to May 2021, when the most recent contract expired. It provides for 3% annual salary increases for the first four years, then a 3.25% bump in its final year. While far below the pace of inflation, which was 6% in 2022, the annual increase is more than double the 1.25% per year that Adams provided in his preliminary budget. 

Workers also are slated to receive a one-time bonus of $3,000 upon ratification of the contract.

Adams, Garrido and city Office of Labor Relations Commissioner Renee Campion announced the deal Friday morning from the City Hall rotunda.

“It is a great deal for workers and fair to the city taxpayers,” said Adams. “This is a proud moment for me as a mayor of this city, and it’s a proud moment as a son of Dorothy Adams,” he said, invoking the memory of his late mother, a food service worker and DC37 member.

Most municipal workers hoping for flexible or hybrid work of the kind now prevalent in the private sector will have to wait a little longer. The city and DC37 have agreed to a pilot program starting later this year for workers with the ability to work remotely, like those in information technology, but offered few additional details.

The issue has split the union’s membership: some locals opposed the measure because their members — such as school crossing guards, EMTs and skilled laborers — are unable to work remotely. 

Garrido expressed faith that members will endorse the deal.

“It is now up to the members to decide. We are confident based on the feedback for the bargaining committee that our members are going to ratify this contract, but it’s really up to them right now,” Garrido said. “Again, on behalf of those members on behalf of the City of New York, Mr. Mayor, your team, we want to thank you and this process was very difficult, but we got it done.”

The deal was a major test for Adams, a retired NYPD officer who won his election in 2021 in part because of his endorsements from labor and his rank-and-file bona fides. For months, negotiations for anticipated pay raises were tied up in a protracted battle over a cost-saving scheme to change retirees’ free health care coverage to a controversial Medicare Advantage plan. 

The planned Medicare Advantage shift originated in deals struck by former Mayor Bill de Blasio and the unions to pay for raises by finding health care savings.

As the largest public sector union, DC37 sets the pattern for wages and other benefits that other unions follow in their own negotiations. Nearly all of the city’s roughly 300,000 unionized staff are working under expired collective bargaining agreements.

The United Federation of Teachers is expected to bargain with the city next. The UFT and DC37 jointly represent 60% of the city’s workforce.

Rethinking Remote Work

Adams, who one year ago dismissed allowing remote work in the public sector entirely, softened his stance on the issue in recent days. 

Asked on Monday whether he was considering a remote option, he said: “What we are doing is we are sending out a survey to our agencies and we’re saying to our agencies ‘come up with creative ways of having flexibility.’”

Announcing the labor deal Friday, Adams said hammering out telecommuting and other hot-button issues “excited” him.

“We are making decisions right now that’s going to impact what the city is going to look like in the future. So I’m excited about all of these things,” he said. “I’m excited about the challenges of remote work or not, I’m excited about the challenges of dealing with large numbers of asylum seekers, I’m excited about making our city safe.”

Public sector workers who spoke with THE CITY absorbed the news of a telework pilot with a mix of relief and skepticism.

“There’s no putting the genie back in that bottle,” said a supervisor at the Administration of Children’s Services who is a member of SSEU Local 371, which is part of DC37. 

“It just shows a new way of operating,” the supervisor said. “We don’t want to go back to the old — the old was never really working for a lot of people. So the pandemic really showed that we can work productively.”

Others, while pleased to hear the mayor’s about-face on telework, were frustrated by the scant details on the plan. In group conversations, workers have argued that the city pivot to telework during the lockdown was already akin to a pilot, said Jeremiah Cedeño, founder of the advocacy group City Workers for Justice.

“To now have a committee and a pilot, it’s not as progressive as the announcement tries to make it seem,” said Cedeño, a former city worker. “It feels like this is going to slow things down further.

“There’s still not a lot of clarity as far as what are workers giving up for some of these things,” he added.

Reasonable and Unfunded

Some workers who spoke with THE CITY also said that, amid high inflation, a 3% annual wage increase is akin to a pay cut — while acknowledging the raises were slightly higher than they expected.

The city and the union agreed to a $73 million “equity fund” to support recruitment and retention in departments and roles that have experienced chronic understaffing, Campion said. They also agreed to establish a child care trust fund, which will receive $3 million a year going forward, she added.

In a boost to low-wage school crossing guards and clerical workers, the tentative agreement also accounts for increasing the minimum hourly rate to $18 an hour, up from the current $15 state legal minimum wage, effective in July upon ratification, to be paid for by the equity fund.

Joshua Freeman, a municipal labor expert and professor emeritus at Queens College, said in an interview that the fact that the city was able to reach a tentative agreement on wages before settling the health care plan “shows that there was money available all along to deal with labor contracts.”

“Yes, the savings potentially could be very important,” he added. “But in the huge New York City budget, there’s always money squirreled away in reserve funds and elsewhere, that makes it possible to settle a contract.”

Still unclear is how the city will fund the raises and other benefits. 

During Friday’s announcement, city Budget Director Jacques Jiha said that the city is “going to take some measures to basically find ways to fund the deal.” He added that the city budget will need to reflect additional savings.

“Given inflation, these are very reasonable raises but the city doesn’t have a way to pay for them,” said Andrew Rein, president of the fiscal watchdog group the Citizens Budget Commission, who advocated the administration adopt a multiyear program to make city government more efficient and less costly.

If the DC 37 contract sets the pattern for raises, the raises would add $16.2 billion to city spending over the next four years, the Citizens Budget Commission estimated Friday, even after deducting the amount the Adams administration has already set aside.

The city currently faces budget deficits of some $15 billion in those years, setting the stage for some painful decisions on cutting programs or increasing taxes.

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