Talks continued early Friday morning between a Long Island school bus contractor and its workers to end a labor dispute and head off a strike that could leave 15,000 students scrambling for other forms of transportation.

As of 2:30 a.m. Friday, negotiators for Teamsters Local 1205 and Ronkonkoma-based Baumann & Sons Buses Inc. still remained locked in discussions at the union's Farmingdale headquarters.

Federal mediation between the union, the bus company and its affiliate Acme Buses, began last week and continued Monday and Tuesday, when the parties agreed to break until Thursday while the union reviewed revisions to a roughly 90-page draft contract. They re-entered discussions at 2 p.m. Thursday.

Before breaking Tuesday, union president Timothy Lynch told Newsday the two parties remained divided on several issues. Baumann/Acme has 800 vans and small buses and 200 full-size buses. It employs 776 drivers, 406 drivers' assistants and 65 mechanics.

The company operates buses for about 35 districts across Long Island, and the federal mediation process has been closely watched by school districts and parents who would be affected by a strike.

Lynch has said workers are prepared to strike if their demands for more pay, better working conditions and more company contributions to employee health and benefit packages are not met.

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He said some employees -- who drive and work on bus company vehicles -- cannot support their families on $11 to $13 an hour. The bus company has accused the union of being inflexible in demands for what the firm said amounted to a raise of 16 percent to 34 percent, depending on the job.

The mediator has instructed both sides not to speak to media about the progress and any specific developments during talks.

If workers do strike, the effect would vary by district, as some only use a few of the company's buses and drivers, while others -- such as Commack -- contract 100 percent of busing duties to Baumann/Acme.

Public school districts are also required to transport children to BOCES, special education centers and private and parochial schools. Those students are expected to be affected in the event of a strike, as a number of districts only or primarily use Baumann/Acme.

In addition, those buses often travel farther outside a student's home district and parents in many cases would be faced with the hardship of longer commute times if they are forced to find alternate transportation.