The other postretirement benefits obligation and related expense or income are impacted by certain actuarial assumptions, including the health care trend rate. An increase of one percentage point in health care costs would increase the accumulated postretirement benefit obligation by $0.8 million and would increase the service and interest cost by $41 thousand. A corresponding decrease of one percentage point would decrease the accumulated postretirement benefit by $0.8 million and decrease the service and interest cost by $46 thousand. For pension and postretirement benefits, actuarial gains and losses are accounted for in accordance with U.S. GAAP. Refer to Note 16 of the Notes to the Consolidated Financial Statements for additional discussion. The Company has contingent liabilities related to litigation and claims that arise in the normal course of business. The Company accrues for contingent liabilities when management determines it is probable that a liability has been incurred and the amount can be reasonably estimated. Liabilities are recorded based on management’s current judgments as to the probable and reasonably estimable outcome of the contingencies. To the extent that management’s future judgments related to the outcome of the contingencies differ from current expectations or as additional information becomes available, earnings could be impacted in the period such changes occur. See Note 13, “Commitments and Contingencies,” to the Consolidated Financial Statements for a description of these matters. Refer to Note 3 of the Notes to the Consolidated Financial Statements. The Company has collective bargaining agreements with its unions. These collective bargaining agreements cover approximately 10% of the total employees as of June 30, 2019. The Labor Agreement with United Steelworkers Local 2-232 expired on July 31, 2017. The Company and the union have met and the Company implemented its final offer to the Union on June 14, 2018, but remains hopeful that the parties will continue to work together to reach a new agreement. This agreement covers 557 hourly employees in the Wauwatosa, Germantown and Menomonee Falls, Wisconsin facilities. The Company has another collective bargaining agreement with its remaining union workforce in Georgia, which expires during calendar 2020, however, it is anticipated that location will be closing in December 2019. At the present time the Company does not anticipate a work stoppage. The United States Environmental Protection Agency (EPA) has adopted multiple stages of emission regulations for small air cooled engines. The Company currently has a full product offering that complies with the standards in those regulations. Canada has adopted updated regulations aligning its requirements to US EPA Phase 3, fully taking effect January 1, 2019 for Briggs & Stratton. The Company does not anticipate that compliance with these revisions will have a material adverse effect on its financial position or operations, as they are substantially similar to the existing EPA standards. The California Air Resources Board (CARB) made revisions to its existing evaporative emission regulations for small off road engines. The Company does not anticipate that compliance with these revisions will have a material adverse effect on its financial position or operations. CARB has also announced that it will develop a Tier IV plan which contemplates changing the emission regulations for all mobile sources, however no date of implementation or expectation of emission reductions has been formally announced. The European Union has adopted multiple stages of emission standards for small air cooled engines and will be implementing regulations in 2019 that align with the EPA's Phase 3 standards. The Company does not anticipate that compliance with these revisions will have a material adverse effect on its financial position or operations as they are substantially similar to the EPA's existing standards. 33 Emissions Labor Agreements Other Matters New Accounting Pronouncements Contingent Liabilities