Erie County government’s largest labor union has reached a contract agreement with its unit at Erie County Medical Center, a step that officials say makes the hospital more competitive.

The agreement covers 1,267 employees who work in medical as well as nonmedical areas at the Grider Street campus, including billing, technical support and licensed practical nursing.

Provisions include an approximately 15 percent salary increase over the course of the five-year agreement.

Employees will receive a $2,000 signing bonus and a $3,000 increase to their base pay this year and a 2 percent raise each year from 2014 through 2017. Employees agreed to contribute 15 percent of the cost of their health insurance, which previously was all paid by ECMC.

Two holidays – Election Day and Columbus Day – were eliminated, but employees received one day off of their choosing as a “floating” holiday. Civil Service Employees Association members at ECMC will retain the right to “sell back” a week of vacation time for an extra week of salary.

Also, lunch breaks will decrease from an hour to 30 minutes. Summer hours – when employees were able to leave 30 minutes early during that season – will end for the 65 percent of employees who had them. These changes are considered more in line with current conditions in the health care industry, officials said.

In 2004, the county converted ECMC into a public-benefit corporation to give it more management flexibility. But the medical center continued to employ public-sector workers with county-negotiated contracts.

“We are a different business than the county, and we needed to negotiate a contract that works for us. This puts us in a better position to grow the campus,” said Jody L. Lomeo, chief executive officer of ECMC.

The agreement also calls for changes in retiree health insurance. Retirees previously received 100 percent paid health insurance if they were vested in the New York State retirement system and had five years of continuous service.

Employees hired after March 7 will not receive fully paid retiree health. However, employees with at least 15 years of service who retire by the end of 2017 will receive fully paid insurance.

“We’ve taken a long-term liability and shrunken it significantly. We just couldn’t sustain 100 percent health care,” Lomeo said.

CSEA employees will work under this separate agreement for the life of the contract and remain members of Local 815, Erie Unit. Rob Mueller, a labor relations specialist for CSEA, said the agreement, which members ratified Thursday, came together after ECMC reached out to CSEA officials, who had been negotiating with the county for an overall contract. An offer by ECMC to add $3,000 to employees’ base pay helped cement the agreement, he said. “This guaranteed that everyone would stay ahead of the game after their 15 percent contribution to health insurance. The contribution won’t outpace wages,” he said.

In a statement, County Executive Mark C. Poloncarz commended ECMC and CSEA. The county has yet to finalize a deal with CSEA for other county employees represented by the union. The union’s contract expired in late 2006. Overall, the union represents about 3,500 workers spread throughout county government and ECMC.

CSEA members last year voted down a proposal that would have given them cost-of-living raises totaling 11 percent for 2012 through 2016, as well as a signing bonus for the previous years in which employees worked under an expired contract. The rejected proposal also would have required workers to pay a portion of their health insurance costs, in addition to other concessions.

Mueller said the union is hopeful the ECMC deal sets the stage for an agreement with the rest of CSEA workers in Erie County.

ECMC officials for many years have advocated for a separate bargaining unit at the hospital. However, such a change would require state legislation.