The agreement with the United Food and Commercial Workers also imposed a rise in employee health care contributions to 5 percent of salary in the contract's fourth year. That is up from 3 percent.

The state store employees also agreed to a two-day reduction in sick leave. Employees will receive a 4 percent increase in base pay over the life of the new contract, compared with a 10 percent bump and $1,250 cash payment in the previous agreement.

The new deal is expected to save the commonwealth $28.5 million, Secretary of Administration Kelly Powell Logan said. It is retroactive to last July, said Dan Egan, a spokesman for the state Office of Administration.

The average annual salary is $31,388, Egan said.

The administration emphasized that the new contract does not prevent the commonwealth from pursuing privatization of the state store system, an ongoing debate in Harrisburg.

Negotiations are ongoing with the Independent State Store Union, which represents an additional 700 Liquor Control Board employees.