FLASH REPORT #1: 2026 City of San José Labor Negotiations

SOURCE:
City of San José

CONTACT:
Demetria Machado, Deputy Public Information Officer, City of San José
408-535-7777

Date of Update: August 12, 2026

The City will provide updates on the status of labor negotiations through weekly Flash Reports.

Labor Negotiations informational webpage: www.sanjoseca.gov/laborinfo

BACKGROUND

As of today, none of the City's workforce is on strike.

The City began contract negotiations in February 2026 with the Municipal Employees' Federation (MEF), AFSCME, Local 101, and the International Federation of Professional and Technical Engineers (IFPTE), which represents the City Association of Management Personnel (CAMP), the Association of Engineers and Architects (AEA), and the Association of Maintenance Supervisory Personnel (AMSP).

The City started bargaining early with the shared goal of reaching agreements before the existing labor agreements expired on June 30. The City held more than 15 formal sessions each with MEF and IFPTE.

After several months of negotiations, the City's collective bargaining agreements with these four unions expired on June 30, 2026, Together, MEF and IFPTE represent approximately 4,600 full-time and part-time employees across the City. Starting Tuesday, August 11, MEF and IFPTE began voting to authorize a strike.

Earlier in 2026, the City reached agreements with three other unions that included 3% general wage increases for Fiscal Years 2026-2027, 2027-2028, and 2028-2029 plus an additional 1% one-time non-pensionable lump sum payment. The same compensation increases were provided to unrepresented staff who do not collectively bargain.

BUDGET

The City is navigating a challenging fiscal environment. In this current Fiscal Year (2026-2027), the City resolved a $50 million General Fund deficit that required service reductions to the community and position eliminations. The City's most recent forecast projects additional deficits of roughly $27 million and $12 million in the next two Fiscal Years (Page 3 of the 2027-2031 Five-Year Forecast).

Despite these fiscal challenges, the City did not seek economic concessions or a "status quo" rollover contract from its unions, which are typically sought when a jurisdiction is facing a budget deficit. Instead, the City continued to bring forward compensation increase proposals while also seeking ways to address the operational and workplace priorities raised during negotiations.

CITY'S LAST, BEST AND FINAL OFFERS (LBFO)

Following more than 15 bargaining sessions with each unit, the City presented LBFOs to MEF, AEA, AMSP and CAMP on June 11, 2026. The offers include a range of economic and non-economic benefits, and 3% wage increase in each of the Fiscal Years 2026-2027, 2027-2028, and 2028-2029 for a total 9% wage increase. Additional information from the formal negotiation process is available at:

On June 18, 2026, MEF formally rejected the City's LBFO, and declared impasse. On June 26, 2026, AEA, AMSP, and CAMP formally rejected the City's LBFOs, and declared impasse.

The MOAs between the City and AEA, AMSP, CAMP, and MEF expired on June 30, 2026.

MEDIATION BETWEEN THE CITY AND MEF AND IFPTE

On July 6, 2026, the City participated in mediation with AEA, AMSP, and CAMP. Between July 10 and July 24, the City engaged in four mediation sessions with MEF. Throughout these discussions, the City remained open to modifying and enhancing proposals in response to priorities raised by the employee organizations. While the parties made progress on a number of issues, no agreements were reached during mediation. During informal negotiations in June 2026 and during mediation sessions in July 2026, the City's offers included:

• Wages:
  • Fiscal Year 2026-2027 = 3% wage increase + 1% one-time non-pensionable lump sum payment;
  • Fiscal Year 2027-2028 = 3% wage increase;
  • Fiscal Year 2028-2029 = 3% wage increase + additional wage increase if the City's General Fund has a surplus;
  • • Agreement to discuss converting 1% of an employee's non-pensionable pay to a pensionable pay if the Federated Retirement Plan is 80% funded in Fiscal Year 2028-2029;
• Policy revisions to fortify AI guardrails and require human oversight related to decision-making;
• Agreement to provide "Fatigue Pay" to designated classifications; and
• A comprehensive proposal to integrate City Council staff newly represented by MEF, including discussion of benefits unique to those classifications.

NEXT STEPS

The City remains committed to reaching agreements that recognize the contributions of its workforce while ensuring the City can continue delivering essential programs and services to our community now and into the future. The City has communicated to MEF and IFPTE that it is ready to return to the bargaining table or mediation at any time, including evenings and weekends.

If a strike is authorized and it potentially affects libraries, community centers, and other services, the City has begun preparing to help minimize impacts to the community. Critical public health and safety services, including police and fire and wastewater treatment, will continue regardless of a strike.