Tom Farkas, communications and training coordinator for the Maine Service Employees Association, hangs a banner during the Central Maine Labor Council’s Labor Day barbecue in Skowhegan on Sunday. Anna Chadwick/Morning Sentinel

The Mills administration will pay thousands of public sector workers a one-time $2,000 payment under an agreement that also includes a review of public sector pay.

The agreement announced by the administration on Thursday is in response to a complaint filed in February by the largest public employee union with the Maine Labor Relations Board.

The administration opposed a request by the Maine Service Employee Association, SEIU Local 1989, for a new pay classification study, noting that state employee wages have increased by more than 24 percent under Gov. Janet Mills — more than in the previous 16 years combined.

But union leaders said the administration’s 2020 salary survey was out of date and accused the administration of ignoring a legislative mandate to update the survey to account for historical inflation levels. The union argued that Maine state workers had fallen behind comparable private-sector workers despite pay raises under Mills.

In response to the complaint, a spokesman for the Department of Financial and Administrative Services, which oversees contract negotiations, said at the time that the union’s case “is based on flawed legal claims and factual inaccuracies” and ignores steps the administration has already taken to close the pay gap.

But in a news release Thursday, DAFS Commissioner Kirsten Figueroa said she was “proud and happy” about the agreement, saying it “embodies the governor’s long-held belief that talking is better than litigation.” She also noted the administration’s efforts to improve pay and benefits for state workers.

“This new study, supported by another generous lump sum payment, will increase our support for state employees and allow us to continue to focus on parity in our classification system,” Figueroa said. “Our goal, since the governor’s tenure, has been for Maine government to succeed as an employer of choice, which includes providing competitive wages and benefits that can match the rewards of serving Maine residents.”

A spokesman for the union, which represents more than 9,000 public sector workers in the contractor sector, could not immediately be reached for comment.

Starting in October, salaried employees will begin receiving one-time payments of $2,000. The administration said payments for part-time, seasonal and occasional workers will be prorated and some exceptions will apply.

Details of these exclusions and the total cost of one-time payments are not currently available.

Making a payment is an acknowledgement that a new study, which will be conducted by a third party, will take some time.

The study aims to check whether government wages are competitive enough to attract and retain qualified workers, and whether positions requiring similar work, knowledge, skills, abilities and responsibilities are grouped together fairly and consistently.

The report is due by December 31, 2025. Once it is made available, the state will begin negotiations on the report’s findings and recommendations beginning in May 2026. DAFS is required to submit the report to the Legislature by September 1, 2026.

The administration said the new salary survey is the “next logical step” in efforts to close the pay gap between public and private sector workers, which the union says makes it difficult to fill vacancies.

In addition to the pay increase, the administration noted that half of all state employees qualify for the new pay range, which increases their overall pay increase to about 29% over the past six years. Officials also noted that they have strengthened the seniority bonus for those employed for more than five years, provided a 7% promotion bonus (up from 5%), merit raises and various stipends, shift bonuses and allowances.

The union’s complaint comes just after the administration concluded a difficult round of contract negotiations that required mediation because the state and union were out of sync over employee pay by hundreds of millions of dollars.

The union ratified four contracts in December that included a 6% raise in January, an $800 expected paycheck in February and an additional 3% raise in July. They also included child care reimbursement of up to $2,000 for some employees, increased travel reimbursement and increased seniority pay after five years of employment.

This story will be updated.

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