According to New York State Comptroller Thomas DiNapoli, the MTA could save significant amounts of money by overhauling its approach to overtime. In a letter sent to the MTA and obtained by the Daily News, DiNapoli said that overtime spending cost the MTA nearly $577 million in 2008. Furthermore, fewer than 5 percent of the authority’s workforce earned 30 percent of the overtime with some LIRR mechanics — the most egregious overtime earners — taking home $200,000 in overtime pay or more than three times their base salaries.
DiNapoli’s letter highlights the need for the MTA to reform its work practices and for its unionized workers to accept that reform. At a time when the authority’s deficit is spiraling out of control, the MTA simply cannot afford to be lax about its overtime regulations. “The high cost of the MTA overtime is a significant issue,” DiNapoli said. The overtime payouts “adds to concerns about whether the MTA has done all that it can to contain costs.”
For his part, MTA CEO and Chairman Jay Walder promised reform. DiNapoli’s study covers the 2008 time period, and Walder has been in the job since only October 2009. Cutting overtime abuse has been one of Walder’s recently talking points, and he reiterated that to the Daily News. “My top priority,” he said, “is finding ways to reduce our costs by targeting areas like overtime and contracting, and we are grateful for any help the controller can provide as we begin to make the MTA more efficient.”
13 comments
A large part of the overtime problem with the MTA is that are understaffed in almost all unionized titles. They would rather run with less employees and pay the o.t. than hire the needed amount and pay salary and benefits.
The MTA runs lean in all of it’s agencies in operating personnell but they have a ridiculous amount of reduntant managers and office workers. This is something that has always puzzled me.
If the LIRR had enough mechanics they there would be no need for those guys to make 200k in overtime pay.
So… which is cheaper? I don’t care if some mechanic is pulling in 200K a year if it’s cheaper than hiring 2 more mechanics. But that’s not what the comptroller seems to be implying above.
MTA management always says that it is cheaper to pay the O.T.
That’s shockingly hard to believe on both the white and blue collar fronts. Would they really be paying additional staff in excess of $500 million? If so, then the supposedly bloated MTA seems to be woefully understaffed.
It might be less expensive to pay the overtime than to pay regular wages plus new benefits costs to additional personnel.
This is exactly what I was saying. But Ben finds it “shockingly” hard to believe.
I understand that now. I wasn’t picking up on what you were saying, but that plus what Niccolo said below makes more sense. So then maybe the problem is that DiNapoli keeps going on and on about it?
This is indeed a good argument against the MTA’s supposed bloat. Above market wages guarantee lower employment and higher unemployment.
If the MTA can afford to spend $30/hr for janitorial services, and the market rate is $15/hr but the law mandates a minimum wage of $30/hr, all the MTA will do is hire one janitor instead of two and then also pay him $45/hr for occasional overtime work (since there is enough work for two people). The station stays dirty, the regional unemployment rate stays high, too much money is spent, and the MTA is broke.
Considering what else I know about Albany, sounds entirely plausible.
I believe much of the overtime exists in reactive types of roles and isn’t easily avoidable. For instance, a rail breaks in the cold weather, and you suddenly need to dispatch track crews to repair the break and stay there ’til it’s done. Or a rarely-used crossing gate in the far-off reaches of the LIRR Greenport branch breaks, and a crew has to spend an hour in traffic just to get there before replacing it (meanwhile the train crews are accruing OT since the train can’t cross the unprotected street, and still need to get passengers and equipment to its destination). When trains or signals break down, they throw as many people on the job as they can to fix it as quickly as they can.
Much of the OT accrues to keep service disruptions to a minimum. If you want to avoid OT, you need to either (1) keep lots of extra workers on standby, or (2) accept more diversions and cancellations when things break down.
In light of the threatening snowstorm this weekend, the LIRR appears to prefer the latter.
“That’s shockingly hard to believe on both the white and blue collar fronts. Would they really be paying additional staff in excess of $500 million? If so, then the supposedly bloated MTA seems to be woefully understaffed.”
Typed by someone who has never made a payroll or lived off of overtime as almost all wage workers must in today’s world.
In almost all employers, union and non-union, public and private,
overtime is the cheapest hour of the day. Before the Great Recession hit the average work week in manufacturing was 49 hours, now it is about 44. Nonetheless, time paid not worked (vacations, holidays, sick days, personal days,bereavement leave, jury duty) health and welfare, defined benefit and defined contribution pensions all generally add up to more than half of the hourly rate.
Employers who have a heavier portion of the total labor cost paid out in benefits have a greater incentive to substitute overtime labor for new hires. This is especially true of the LIRR even though new employees start at 70% of the hourly wage rate of the existing workforce.
Still though $500,000,000/50,000 hourly represented employees = $10,000 per employee of overtime/$42 = 238 hrs of OT (42 is time and one half for $28 hr. workers) 238hrs./52 weeks = 4.5 hrs. per week, very close to the national average.
Of course above you were using $31 and hr for the car repairmen in question and there are not really 52 weeks there are 48 or 49 but you get my point that the OT whack on the LIRR is really not too far out of range for the average hourly wage worker (not bloggers, they work long hours for almost nothing and apparently enjoy it).
Given the high value of benefits in MTA jobs I’m surprised the OT total is as low as it is. The hiring freeze will of course only exacerbate the need for overtime. The classifications referenced above are particular skills that take a long time to develop and also dangerous and dirty, cold and hot. End the OT and that skilled senior mechanic will probably go somewhere else and his job will be left open until it is filled by a junior guy (it takes time to develop the skills). Until that happens they will have to bring in a skilled guy on OT to cover the job. Wash, rinse, repeat.
The only thing more repetitive than this cycle are the endless string of audits run to study the matter. DiNapoli has several file drawers full of studies over the last 30 years on the LIRR. Its an evergreen Groundhog Day story. And, if the MTA really tightens their belt, there will be even more OT to shock you.
There’s allot that can be done to reduce overtime costs. They just need to try to make things more efficient and reduce the ridiculous union contracts that allow union employees to manipulate and game the system. Things are inefficient on purpose in order to jack up OT costs. There are plenty of jobs that have built in Overtime and all sorts of ridiculous union contract rules that jack up the amount of overtime employees rake in.
These rules were put in effect to enable workers to go home and have a life, not as a racket to rip off taxpayers. They were supposed to dissuade management from keeping workers on the job 6-7 days a week 12-16 hrs a day, like in the “good old days”. It’s cheaper for management to use the workaholics than hire more people. This is a management decission, the union i’m sure would rather see more new hires working 40 odd hours a week.
The LIRR ot & work rules are a shame, its no wonder its the most expensive RR system in the country. Someone in management has to step up and say “enough already”.
The bulk of the “workers” are a joke. The average 3rd grader has more responsibility than these people.
Change the rules, lower the costs, if they strike so be it. Most riders would happily trade a few months of service problems , for the chance to rid the LIRR of these high priced know nothings and fix the LIRR cost structure.