(Bloomberg Law) -- United Parcel Service Inc. has agreed to end a dual wage system for delivery drivers in its next contract with the International Brotherhood of Teamsters, dramatically lowering the chances of a nationwide strike when the current labor agreement expires at the end of July.

The Teamsters announced the tentative pact on Twitter Saturday evening, adding they also persuaded UPS to end a mandatory overtime policy for unscheduled workdays and provide Martin Luther King, Jr. Day as a paid holiday.

In a statement Sunday, UPS spokeswoman Natasha Amadi said the agreement would move current part-time drivers to a Tuesday through Saturday shift to accomodate weekend delivery.

The breakthrough came after a marathon day of negations in Washington, where representatives for both sides scurried in and out of a closely guarded hotel meeting room. The Teamsters-UPS agreement is the largest private-sector collective bargaining agreement in the US—and a linchpin in the supply chain, representing 340,000 drivers.

The Teamsters made it clear from the start they would not agree to any proposal that continued the dual wage tracks established under the last contract. Part-time drivers, the lower tier, make $5 an hour less than full-time drivers, who have a top rate of $39 an hour.

“We had part timers going to work in these warehouses with total disregard for themselves and their families” during the Covid-19 pandemic, Teamsters President Sean O’Brien said during a break Saturday. “We had members that died because they went to work to provide these services to the general public.”

Talks ground to a halt June 28 when the Teamsters walked away from the bargaining table, accusing UPS of blindsiding them with last-minute requests for concessions. The union agreed to resume talks June 30—setting a deadline of July 5—after UPS proposed a more favorable counter proposal.

“But make no mistake—we are not done,” O’Brien said in a statement on Twitter. “UPS knows we must reach full agreement on other economic issues, including higher wages, within the next few days.”

Negotiations are scheduled to continue Sunday.

To contact the reporter on this story: Ian Kullgren in Washington at ikullgren@bloombergindustry.com

To contact the editors responsible for this story: Genevieve Douglas at gdouglas@bloomberglaw.com; Laura D. Francis at lfrancis@bloomberglaw.com

(Updated to include a statement from UPS in the fourth paragraph.)