Seven hundred workers at textiles maker Malden Mills Industries are threatening strike action this week after its biggest union voted to snub the company's final contract offer.

Members of the UNITE HERE union rejected the three-year contract offer, which included pay increases and increased health insurance premiums for employees, according to the Lawrence Eagle Tribune.

The contract would have tripled employee contributions for individual health insurance membership to $18 a week, whilst premiums for families would nearly quadruple from $9 to $35. Employee contributions would increase in the second and third year of the contract.

According to the labour union, the vote means that it cannot accept Malden Mills' final offer.

The contract was to be the first made between the mills' new owners - who took over as the company emerged from bankruptcy protection last year - and the union.

Malden Mills makes Polartec fleece and other fabric used in a variety of clothing and blankets.