This story was updated on October 21 at 5:33 p.m.

More than 200,000 U.S. Postal Service workers will receive a nearly 5% pay increase over the next year if the largest mail carrier union accepts the new contract its leaders negotiated with agency management.

Employees will also have more opportunities to work overtime and be able to move up their pay scales more quickly, the National Association of Letter Carriers said of their new tentative agreement. The contract must still be approved by NALC members before taking effect. Failure to ratify the deal would likely result in arbitration.

The deal would cover the period from May 2023 to November 2026, meaning the first two of three planned 1.3% pay increases would apply retroactively. Employees would also benefit from a series of cost-of-living adjustments, the first three of which would also be paid retroactively and would total about $2,300.

“After nearly 20 months of tireless negotiations, we are pleased to reach a fair agreement that rewards our members for their contributions to the Postal Service and their service to the American people,” said NALC President Brian Renfroe.

Doug Tulino, USPS deputy postmaster general and chief human resources officer, said the deal would allow the agency to advance Postmaster General Louis DeJoy’s 10-year plan to reform postal operations and stabilize his finances.

“This is a fair and responsible agreement that serves the best interests of our employees, our customers and the future of the Postal Service,” Tulino said, adding that it would allow the USPS to “modernize our operations, so that we can better adapt to changing customer needs and provide excellent service.

Under the agreement, the Postal Service would continue to pay an average of 72 percent of employee health insurance premiums, with its share of the costs not exceeding 75 percent for any plan. Employees could clock in and leave without any retaliation if they worked 11.5 hours per day or 60 hours per week. Those who choose to work longer will automatically receive 2.5 times their normal salary, without having to file a complaint.

Some steps on the letter carrier pay scale would be increased under the contract, while employees would be able to move up to higher levels more quickly. Workers could sell back up to 40 hours of annual leave if they reach maximum turnover and have taken less than 75 hours of sick leave in the year.

Renfroe said that in a negotiation, “nobody gets everything they want,” but overall there are no major issues on which he feels he needs to make concessions. He called it a “fair deal” that maintained a generous cost-of-living adjustment formula and met the economic needs of its members.

The deal would maintain caps on part-time, non-career positions called transit assistants. DeJoy often boasted of his efforts to stabilize the workforce by converting nearly 200,000 part-time employees into career positions throughout his tenure. The union and management agreed to meet regularly to discuss staffing needs across the agency.

The contract would also maintain layoff protections for any career employee who has been on the job for at least six years. The NALC plans to hold briefings for branch leaders in the coming weeks, with ratification votes to follow.

At least some factors were unhappy with the deal. Dozens of posts on a NALC Facebook group with 20,000 members criticized the tentative contract because it only secured a 1.3 percent raise and failed to secure other concessions from the from postal management. Many of these members encouraged their colleagues to vote against ratification and take their chances with an arbitrator. The previous NALC contract included increases of 1.1%, 1.1% and 1.3%, as well as additional cost of living adjustments.

Renfroe said any initial dissatisfaction with the deal likely stemmed from a “lack of understanding” of its contents. A large portion of members will receive salary increases of between 12 and 20 percent over the life of the program, after accounting for cost-of-living adjustments and salary scale increases, he noted .

The American Postal Workers Union, which represents 200,000 other USPS workers, agreed last month to delay the expiration of its existing contract while negotiations continue.

This story has been updated with additional comments from NALC President Brian Renfroe.