The American Federation of Television and Radio Artists and the major record labels have reached a tentative agreement on a new, three-year sound recording contract, the union said Thursday.

The new contract includes base rate wage increases of 2 percent each year of the contract. It also increases the amount employers contribute to health and retirement funds on royalty income by 1 percent over the life of the agreement, expands performers' participation in revenue from the sale of digital downloads and establishes a new payment structure for new areas of low-budget licenses.

The current contract expires December 31.

AFTRA negotiators and representatives from UMG, Sony, Warner, EMI and Disney began talks August 15. Negotiations became testy: In August, AFTRA's national board gave negotiators authorization to strike.

After Wednesday's all-day meeting, the two sides came to an agreement that AFTRA will now send its members for ratification. If approved, the new contract will run through December 31, 2014.