Employees with the local chapter of the United Food and Commercial Workers Union voted to approve a new two-year contract with the Red Wing Shoe Co. Friday afternoon.

"From our viewpoint, the company is very happy with the settlement," Shoe spokesman Peter Engel said. "We're very happy with the outcome."

"I feel OK about it," said union steward Roger Spindler. "Times are tough; we had to make some concessions."

The Shoe and the Boot & Shoe Workers union had been negotiating the new contract for about two months.

The agreed-upon contract covers a variety of things, including wages, benefits and incentives. "It's pretty complex," Engel said.

Among those components, Spindler said there were three big changes with the new contract. The first switches employee health insurance from what he calls a "more traditional" plan to a high-deductible plan that includes a health savings account.

"That was one of the large issues," Spindler said.

Also in the contract are the terms for a new company match for the union worker's 401(k) plans. Previously, the employees had 401(k) plans set up by the union, and the Shoe did not match their contributions.

Spindler said that agreement comes alongside the Shoe's decision not to reinstate pension accruals, which were suspended in 2003.

"From 2004 through the end of 2011, (employees) gained no credit on pension," Spindler said, adding that employees had been hopeful that those benefits would be reinstated for the past eight years.

But the new contract definitely states that will not happen.

"(It was) hard for some senior people to realize they were losing eight years of pension benefits," Spindler said.

The third "large issue" with the new contract was the creation of a short week, Spindler said. Previously, workers were guaranteed 40-hour work weeks.

Under the new contract, employees may now get 32-hour work weeks. Spindler said the short weeks would be "intermittent."

To help make up for the lost hours, Spindler said those employees could be eligible for unemployment through the state's Shared Work Program. Still, he added that the program has many requirements and qualifiers, and about 125 union employees would not be eligible for the program.

There are around 525 Shoe employees in the United Food and Commercial Workers Union, Spindler said. Of those, about 320 voted Friday.

"It was a good turnout," Spindler said.

The new contract will probably be signed later this week, Spindler added.