The 3,400 Chicago municipal workers represented by the American Federation of State, County and Municipal Employees will receive 2 percent pay increases for each of its five years.
Members of the union voted Tuesday to ratify the contract, which took two years to negotiate. The agreement is retroactive to July 1, 2012 and runs until June 30, 2017.
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In announcing the contract agreement with AFSCME, Mayor Rahm Emanuel said it is "balanced and responsible," and represents the interests and needs of Chicago's taxpayers and employees.
City officials say the new contract includes a new starting salary that is 8 percent less than the entry rate stipulated by the previous contract.