San Jose reaches tentative agreements with city unions

Averting a potential strike, city officials and labor leaders announced a tentative deal Friday morning that will cover more than 4,500 full-time and part-time city workers.

Under the proposed three-year contract, workers will receive guaranteed 3% annual raises and an immediate 1% bonus to help offset inflation, according to the city. The deal also includes the potential for an additional 1% raise in the final year if the city hits budget surplus goals, alongside new workplace protections regulating the use of artificial intelligence.

“The agreement represents significant progress toward addressing workers’ priorities, such as AI guardrails and employee retention, and securing a contract that recognizes and respects the workers who keep the city running,” the International Federation of Professional and Technical Engineers (IFPTE) Local 21 said in a statement.

The breakthrough comes weeks after members of IFPTE Local 21 and AFSCME Local 101 authorized a strike in August. Since then, the city and unions had been in a fact-finding phase, a mandatory step before a walkout can occur.

Together, the two unions represent a wide range of the workforce, including city management, engineers, architects and maintenance supervisors.

Following months of negotiations that began in February 2026, city leaders praised a deal they called fair and fiscally responsible.

“These agreements avert a strike and the interruption of city services,” Mayor Matt Mahan and City Manager Jennifer Maguire said in a joint statement.

A walkout would have disrupted public services, including libraries and animal care.

The deal arrives as San Jose grapples with limited finances due to stagnant revenue and increasing costs. Earlier this year, the city closed a $50 million budget deficit through some service cuts, project delays, and new revenue like the increased hotel tax. While the outlook has improved, the city is still projecting shortfalls of nearly $27 million and $11 million over the next two years, respectively.

Throughout negotiations, the unions emphasized that the region’s high cost of living is pricing municipal workers out of the area.

The deal ensures the city can continue to “recruit and retain skilled professionals our communities depend on,” according to Carlos Murillo, an IFPTE Local 21 vice president and associate engineer at SJC.

“In a time of rising costs and economic uncertainty, our members showed up and made their voices heard,” Murillo said. “While there is still a process to complete… this agreement is an important step forward for working families and the communities we serve.”

The tentative agreement must now go through a formal ratification process by union members and the City Council.

San Jose has not had an actual city worker strike since 1981, when employees walked out over gender pay disparities.

A strike today would have heavily impacted a city that is already running lean. With just one municipal worker for every 112 residents, San Jose remains thinly staffed. That leaves the city with one of the lowest staffing ratios among California’s largest cities, where only Bakersfield has a lower ratio, according to an analysis by this news organization.

“Workers remain committed to ensuring that the City’s workforce is respected, supported, and equipped to continue delivering high-quality public services,” the unions said.