PEB 248 recommends NJT contract terms

Published: September 25, 2015

whitehouselogoPresidential Emergency Board 248 has issued its recommendations to settle the four year contract dispute between New Jersey Transit and the Rail Labor Coalition of fourteen unions representing 4,300 union workers.

The recommendations on the major issues of wages and health insurance contributions fall much closer to the terms proposed by the Coalition than those proposed by New Jersey Transit, although the Board did backload its wage recommendations to accommodate the railroad’s budgetary concerns.

The PEB found that the Coalition proposals were appropriately based on settlements in the commuter industry, while the company’s unprecedented reliance on a state worker concessionary contract was not persuasive.

Coalition spokespersons said, “The Presidential Emergency Board, composed of three veteran, distinguished neutrals, has proposed terms that represent a reasonable compromise approach to settlement. We sincerely hope that New Jersey Transit will now take this opportunity to bring this protracted dispute to an end.”

The board’s recommendations are non-binding and the parties now have 120 days to reach agreement based on the recommendations.

Summary of PEB 248’s Recommendations

The Board recommended wage increases totaling 18.4 percent in compounded wage increases over 6.5 year or 2.6 percent per year. When increases for health insurance factored in, the recommendations totaled 17.7 percent over the term or 2.5 percent a year.

“Over the years wage settlements at NJT have closely followed the general trend of wage changes at the other large commuter railroads in the region, including LIRR, Metro-North, SEPTA and MBTA. …The Board’s recommendations are consistent with the average annual uncompounded wage increases at the four other large commuter rail carriers. The average annual wage increases of all four of these commuter railroads is 2.6 percent, the same nominal wage rate increase recommended by the Board.”

Although the board recommended an increase in health insurance contributions and an increase in co-payments, the PEB rejected NJT’s proposal for a new inferior insurance plan and their proposal to make employees responsible for 50 percent of excise taxes incurred as a result of the Affordable Care Act.

“The Carrier’s proposal falls outside the current health insurance contribution trends in the industry. Our recommendation would move the employees’ contributions from 1.8 percent to 2.5 percent, which we do not consider an unwarranted increase.”

The PEB rejected NJT’s proposal to eliminate employee ridership passes. The Board also rejected NJT’s proposal to reduce contributions to new hire 401 (a) contributions and also recommended provisions for conductor certification pay.

What Happens Next

The Coalition and NJT have until November 12 to negotiate a voluntary agreement. If no agreement is reached by that time, either side or the Governor can invoke a second Presidential Emergency Board. That PEB will select the most reasonable final offer. Its recommendation again will be non-binding. The parties will then have until March 11, 2016, to reach a voluntary agreement. If no agreement is reached, self-help would then be possible.

The Coalition believes PEB 248’s recommendations provide a fair compromise and the basis of a voluntary agreement. New Jersey Transit is still evaluating the recommendations and deciding on its next steps. No negotiations have yet been scheduled.

Click here to read PEB 248’s report.