The 1970 Postal Reorganization Act, which set up the USPS as an independent self-funding entity, authorized collective bargaining on wages and working conditions generally under laws applying to the private sector, including binding arbitration. Postal workers, like other federal employees, are barred from striking, however.
The Postal Service uses several pay schedules independent of those applying to other federal employees. Bargaining unit employees whose compensation is covered by a labor contract receive pay increases due to length of service (called “step increases”), cost-of-living adjustments (which adjust wages for inflation), and across-the-board “general” increases.
Non-bargaining employees receive increases in compensation under a pay for performance system whose increases reflect the employee’s individual contribution and the organization’s success. They do not receive step increases, cost-of-living adjustments or general increases.
Postal employees who are represented by a union generally must challenge any adverse personnel actions against them through the grievance-arbitration procedure specified in their collective bargaining agreement. Certain employees, mainly those with veterans preference status, managers or supervisors, may appeal instead to the Merit Systems Protection Board.