Amthor Steel is expected to lay off 26 of its 70 union employees.

The layoffs come while the union is negotiating a new contract with the company.

According to a source close to the negotiations, the layoffs take effect Wednesday. Employees were notified of the furloughs Tuesday.

The contract between Amthor Steel and Local 851 of the International Ironworkers Union expired in September. Employees have been working under terms of the old contract.

The union has rejected two contract proposals. The first one reportedly had employees losing health care coverage for dependents. The second proposal significantly raised the cost of that coverage.

The next negotiating session is scheduled for Thursday.

Erie News Now is still waiting to hear back from the company.