Postal Service looks for ways to reduce labor costs

The U.S. Postal Service is negotiating with its unions to curb wages and benefits and increase its part-time workforce, according to an agency official.

USPS on Wednesday kicked off collective bargaining talks with the American Postal Workers Union, which represents 211,000 agency employees. Negotiations with the National Rural Letter Carriers Association, which includes 67,000 career and 48,000 noncareer workers, are scheduled to begin Sept. 13. Current contracts for both unions expire Nov. 20.

In a Tuesday briefing for reporters, USPS Chief Human Resources Officer and Executive Vice President Anthony Vegliante said the Postal Service hopes to develop a more flexible workforce that isn't tied to work hour guarantees and set schedules. The agency needs the ability to adjust hours quickly and use more part-time staff, he said, adding the number of full-time employees must match the work necessary to handle mail volume.

"[We need] flexibility in the form of how we utilize our employees and getting the workforce the mix of different types of employee positions so we can react much quicker to fluctuations in mail volume," Vegliante said. "We need to match our work resources with the workload."

Vegliante expects to lose as many as 300,000 employees through attrition over the next decade, although the Postal Service will rehire for some of those positions. The agency will seek more part-time workers in the future rather than ask full-time employees to reduce their hours. Labor is a significant part of USPS' costs -- wages and benefits amount to 78.4 percent of total expenses, he said.

The Postal Service also will discuss its commitment to the Federal Employee Health Benefits Program, according to Vegliante. USPS currently contributes between 79 percent and 80 percent to employee premiums, while the federal government contributes 72 percent. The agency in past contracts has negotiated a 1 percent per year decrease in contributions and could save $560 million annually if it contributed the same amount as the rest of the government.

In an interview with Government Executive, APWU President William Burrus said he is guardedly optimistic about collective bargaining negotiations, given the Postal Service's financial woes and declining volume of mail. But he plans to ask for additional wages and benefits for his members, he said.

"More -- more control over activities at work, more money, better benefits -- we want more," said Burrus. "We will try to fashion our proposals to reflect the entitlement to more."

USPS officials have asked Congress to allow an arbitrator to consider the agency's financial health if the talks go to arbitration, but Vegliante said he doesn't anticipate the required legislative change will occur for this round of bargaining.

Burrus said he resents the idea that an arbitrator should be required to take into account the Postal Service's financial situation. He called the idea antidemocratic and said it interferes with free collective bargaining.

According to Vegliante, the biggest challenge will be negotiating the right work rules and wage packages while maintaining low turnover, good service and employee trust.

The Postal Service will conduct negotiations with the National Association of Letter Carriers and the National Postal Mail Handlers Union in fall 2011.

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