Scranton, Pa., and its municipal employees, who worked for two weeks for the federal minimum wage, struck a compromise that if approved, would give the employees back pay plus 6% interest.
Mayor Chris Doherty and the labor unions over the weekend worked out an agreement that avoided a court session on Monday. The unions had sought a contempt-of-court citation against Doherty for paying all workers, including himself, $7.25 per hour.
The city, according to the agreement, must settle on all back pay by Aug. 31.
Doherty said Scranton, whose reserves dipped to as low as $5,000 one month ago, will be able to meet its August payroll. But the city must revise its financial recovery plan, which Doherty says is necessary for Scranton to obtain a $16 million loan.
Over the weekend, the mayor and City Council compromised on a recovery plan that it has submitted to the state Department of Community and Economic Development and the Pennsylvania Economy League for review.
Doherty lowered his proposed residential property tax increase over three years to 33% instead of 78%. The plan also seeks to reinstate a commuter tax and create sales and amusement taxes.