Home MTA Economics Controlling costs by targeting overtime, sick days

Controlling costs by targeting overtime, sick days

by Benjamin Kabak

Earlier this morning, the various presidents of the MTA’s subagencies and authority COO Charles Monheim gathered with reporters to unveil the next cost-saving measure. As the MTA currently spends $560 million a year — or 13 percent of its total payroll — on overtime, work-rule reform, sick-day abuse and various productivity measures are now on the MTA’s agenda. The authority estimates it can save $22 million in 2010 by acting unilaterally and $60 million a year in 2011 and beyond with union cooperation.

“Some overtime is needed to put out a reliable service and respond to emergencies, but much of it is unnecessary and can’t be justified,” Monheim said. “MTA leadership is now committed to eliminating unnecessary overtime, and we expect new controls to save millions. We will do our part, but a real partnership with labor is the only way to make a real dent in unnecessary overtime.”

During the presentation and subsequent Q-and-A this morning, Transit officials in particular highlighted the way their employees take advantage of a lax sick day system and an overtime scale based on seniority to call in sick but make up the money through overtime shifts. “Someone who is truly sick and can’t do the work, we don’t want them to come in,” Transit President Tom Prendergast said. Rather, the agency is looking to, as Prendergast said, “combat unnecessary mental health days.”

The example Prendergast cited relied upon the above chart. It shows an actual recent schedule from an employee who has been on the job since 1988. As Transit workers are allowed to bank sick days and this employee had no bank, this person has used up his 12 sick days per year since starting in 1988, and MTA officials were skeptical that all were used legitimately. Here, the train operator put in three full eight-hour shifts and an additional 10 2/3 hours worth of overtime work while taking two unpaid days on Wednesday and Thursday.

Not only does this example highlight the way employees can use sick days to cover missed hours, but it shows how overtime works against the MTA as well. Although the employee did not work 40 hours a week, he is still eligible for time and a half if he works more than eight hours on a single day. The MTA must pay him overtime when he doesn’t deserve it and must pay someone else overtime to fill in for the 16 unmanned hours on Tuesday and Wednesday.

Beyond these abuses, the MTA is looking to combat sick-day usage in general. In 2009, 25 percent of Transit employees took 15 or more sick days, and Prendergast was skeptical that every single employee missing so much time was truly sick. As workers used banked sick days for vacation, the costs to the MTA increase in the form of overtime spending. “There has to be an enlightened discussion” with the union,” Prendergast said. “Is this the type of employee we want to protect?”

Outside of sick-day abuse, the officials spoke about work-rule reform and controlling pension obligations through overtime monitoring. As the above chart shows, one Bridges & Tunnels employee was able to take advantage of the way overtime impacts the pension calculation to double the amount he would receive upon retirement. In fact, his annual pension was higher than his annual base salary.

On the commuter rail side, the authority wants to do away with what LIRR President Helena Williams termed “very onerous work rules.” For instance, if an LIRR train switches from electric to diesel or vice versa with the same engineer, the engineer earns double pay for that day even though this engineer is qualified to operate both types of trains.

The MTA knows it cannot accomplish the total elimination of overtime. As Prendergast said at length, 24-hour transit agencies require overtime to function efficiently, but the current overtime expenditures are well above acceptable levels. For now, management will try a top-down approach. It will more aggressive enforce sick day abuses, try to prevent continuous and excessive mega-shifts, report overtime so that the public can understand why the agency is saddled with these costs and work with unions to reform work rules. “In every case,” Prendergast said, “it starts with management taking a different stance.”

The authority heads, however, realize that the unions have favorable contracts and working to streamline operations will be a challenge. “I think we are probably as a whole one of the toughest union environments if not in the city, then in the nation,” Joseph Smith, head of MTA bus, said. “It’s a struggle every day to do a lot of the things that we do, and to do them effectively as we do.”

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Cap'n Transit May 20, 2010 - 7:13 pm

As the above chart shows, one Bridges & Tunnels employee was able to take advantage of the way overtime impacts the pension calculation to double the amount he would receive upon retirement. In fact, his annual pension was higher than his annual base salary.

Can I just say, what the fuck is that about? Does anybody actually have a good reason why overtime should be considered when determining pension payouts?

How long is that going on? Who was it that first tried it? Has nobody ever said anything about it? Someone could write a nice juicy book about just how that concept got to be entrenched in the pension rules.

Boris May 21, 2010 - 9:52 am

Larry Littlefield rails about this about once a week or so. And I’ve already told him to write a book about Generation Greed.

There is an interesting related article in the Times: http://www.nytimes.com/2010/05.....on.html?hp. Except the Times for some reason claims the politicians are innocent, and were misled by state actuaries who made the pension projections too low. Total bullshit, the pols knew exactly what they were doing.

Sharon May 20, 2010 - 7:31 pm

It used to be worse only the last year counted. All city and state labor unions have it.

Nick May 20, 2010 - 7:55 pm

I’m a civil service employee and I know this goes on where I work as well, but not in my specific department. It is amazing when I look at my salary with 5 years of post-secondary education under my belt and see that at B & T employee made more in overtime his last year than I make now. I’m glad they are cracking down on this. Because of abuse in past years I most likely will lose my job. Our agency is way in over it’s head and now the senior employees (many of whom are lazy and just come in for the paycheck) will get to stay due to bumping rights. Perhaps the state should go bankrupt so they can get out of all obligations and start over, because folks…it is truly a mess right now.

Jay May 21, 2010 - 8:35 am

Civil servant here as well, and everything you say is exactly whats going on in my department. I have plenty of education but its the old timers who are raking it in and bankrupting the system.

nycpat May 20, 2010 - 8:27 pm

That T/O’s OT looks like it’s built into his picked job, i.e. he has enough seniority to pick a 10hr job on sat., 9hr job during the week, and get sun/mon off.
I have no problem w/ them going after chronic malingerers but T/O is a safety sensitive position. I would hate to lose the ability to book off sick if say I had a family problem and only had an hours sleep. Docking OT hours as straight time instead of as time and a half seems reasonable but is probably against some state or federal law.
The pension thing needs reforming, but ALL pensions not just MTA. Coppers pensions are out of hand.

oscar May 20, 2010 - 8:59 pm

this kind if sh*t is why i’m sick of hearing moans about “funding” the MTA…not another penny till this crap is fixed.

Cap'n Transit May 21, 2010 - 1:37 am

Oh yeah? How do you expect to get around without another penny going to the MTA?

oscar May 21, 2010 - 9:18 am

c’mon , don’t take that comment so literally

i just want this abuse fixed before we keep crying for more funding as the only solution to budget woes. many transit advocates simply want to throw money at the problem, i think there is plenty of money to save before that is required…not to say that cost savings will solve all problems, but it will definitely reduce the budget gaps, won’t it?

and i think the public at large will more easily accept money going towards service/infrastructure improvements rather than retirement/healthcare benefits. i agree with what you wrote above re: OT being calculated into pensions – i think its BS. i also think the early retirement age is a highly obsolete and financially unsustainable concept (for any public employee, not just TWU). as well as the minuscule contributions employees pay towards pension & healthcare. everything needs to be on the table when we discuss transit funding. i’m sick of labor costs being the untouchable “third rail” (pun intended!)

Boris May 21, 2010 - 9:58 am

Note that the early retirements actually were made even earlier only in the past few years, although you’d think life expectancy figures would cause the opposite. It’s a money grab by an increasingly out of touch state government.

I think many people who are against increasing MTA funding know, at some level, that the problems are with labor, not corruption, inefficiencies, or “two sets of books.” They just don’t realize that the MTA is not to blame, because the pension system exists in accordance with state law, which was basically designed to be abused, not because of the MTA.

Cap'n Transit May 21, 2010 - 5:26 pm

Why shouldn’t I take that comment literally, when most of the State Senate does? Just about every senator cites “wastefraudandabuse” as reasons for defunding the MTA, but apparently there is no waste, fraud or abuse at the city or state DOTs.

Niccolo Machiavelli May 20, 2010 - 9:51 pm

“How long is that going on? Who was it that first tried it?”

I think at least since 1973, maybe 1968 depending on which chapter you are looking at, maybe longer. It is part of the pension plans controlling documents. But that pension hasn’t been in effect for a long, long time. The new pension has built in limits on OT accumulation. I think this is called closing the barn door after the horse got out, or beating a dead horse, or water under the bridge. Not that it isn’t good for outraging tabloid readers and bloggers.

None of that will build a “partnership” with labor. And your sources???

Alon Levy May 20, 2010 - 10:23 pm

Labor’s not the only interest group in the city. Many people in the city like it when city leaders beat on unions – for example, most people who aren’t union members.

Boris May 21, 2010 - 10:00 am

When was the last time city leaders beat on unions (and actually got results that benefited non-union workers)? Certainly not in the past 15-20 years.

Alon Levy May 21, 2010 - 1:03 pm

Giuliani successfully pretended to benefit non-union workers. It’s a crowd pleaser.

Cap'n Transit May 21, 2010 - 12:06 am

Thanks for that info, Nico. At least the barn door has been closed while there are still some horses inside.

I really do want to build a partnership with labor, but as long as they pull stuff like this, and this, and this, it’s pretty tough.

Alon Levy May 20, 2010 - 10:21 pm

Overtime when you work more than eight hours a day isn’t inherently stupid. I can’t really see why it’s so bad. Maybe you do, but you need to argue it, rather than just say it’s evil and post examples of a few OT abusers.

There’s a real danger in announcing blanket OT cuts, which is that some groups of workers have built OT into their work schedule, so that there’s no way to cut it without making service worse. The Wire shows an example of this in policing, where a cut in police OT makes it impossible to solve murders, increasing the crime rate. It’s possible to do it in most cases without hurting performance, but it requires very detailed knowledge of how the workers operate, and I don’t think Walder has it. He’s an expert on good transit for sure, but he may not be an expert on how small subcultures of NYCT employees work.

nycpat May 20, 2010 - 10:38 pm

I saw Walder on CUNY TV recently. He suggested that it was some sort of featherbedding that an express bus driver can’t park in an NYCT garage and then operate a local bus in between rush hours.
There are several reasons ( historical, legal, pratical, contactual ) why this isn’t done but it’s not union racketeering.

Alon Levy May 21, 2010 - 2:37 am

Yeah, it’s a pretty basic rule that you should never assume malfeasance without evidence. Even if I know I’m right and the other side is wrong, it doesn’t matter. Perfectly honest people sometimes think what was good for their grandparents is good for them, and display not-invented-here syndrome.

Of course, there’s a psychological reason a lot of people try to attribute everything to corruption. If I can blame corruption, then I personally can’t be contributing to the problem: I know I’m honest, and that’s enough. If I blame bad business culture or incompetence, then I need to keep looking in the mirror to make sure I’m part of the solution, and I need to painstakingly learn what good operations are to make sure my opinion has any merit. It’s easier to believe in purity than to believe in knowledge.

Scott E May 21, 2010 - 7:58 am

“if an LIRR train switches from electric to diesel or vice versa with the same engineer, the engineer earns double pay for that day even though this engineer is qualified to operate both types of trains.”

Is this referring to the dual-mode locomotives which operate on the west-end of the route using electric power, and the east-end using diesel? That’s the only way a train can switch from electric to diesel; unless it’s broken down and needs a tow by a diesel locomotive. Or do you mean a train engineer who hops off of one (electric) train and onto another (diesel) one, which isn’t quite a train switching from one mode to the other?

nycpat May 21, 2010 - 11:50 am

He must mean the latter which was mentioned in the Times expose of LIRR disabilty pensions. A midnight yard switchman(diesel) was aked to do a morning passenger run(electric). Not for nothing, but those rules were negotiated to deter management from overworking employees, so they can go home after they finish their regular job. So they can have a regular job. But there are plenty of workaholics in transit and management doesn’t want to have xtraboard engineers. I thought RR engineers couldn’t work more than 12hrs, maybe LIRR has a variance.

Nesta May 21, 2010 - 12:32 pm

I believe it’s 16 hours they aren’t allowed to work past.

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paulb May 24, 2010 - 7:02 am

The pension/overtime scam has been going on for so long–someone in my family was ranting about it pretty regularly in the ’69 to ’72 time frame–what’s new? Every now and then the news organizations “blew the whistle,” there was some public posturing, and then it returned to business as usual. It’s part of the institutional culture in some parts of the civil service and the civil service unions are a formidable part of the NYC political culture. I don’t see why I should really believe anything significant is going to be done to bring this under control now; it just may be reinvented by a different name to accomplish the same thing.

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