Collective Bargaining Agreements Added to Costs, Audit Finds
MacIver News Service | May 19, 2011[Madison, Wisc…] In 2010, state employees worked nearly 1.9 million hours of overtime for which they were typically paid at 1.5 times their regular hourly rates, according to a report released today by the nonpartisan Legislative Audit Bureau.
The LAB found that premium overtime hours increased from 2009 to 2010, when they were approximately equivalent to 900 full-time staff positions.
“Agencies have varying operational needs that require employees to work in excess of 40 hours per week, and the State is required to follow federal laws such as the Fair Labor Standards Act (FLSA), under which certain employees must be compensated at premium rates or awarded compensatory time at the rate of 1.5 hours per hour of overtime in lieu of cash payment,” according to the report. “Overtime is most common in state agencies with 24-hour operations and those that address emergency needs.”
The LAB notes that until recently, protocols for assigning overtime hours were negotiated by the Office of State Employment Relations (OSER) in collective bargaining agreements with 19 bargaining units that represent approximately 38,100 state employees.
The change in state law governing bargaining with government employees, which will take place as a result of the passage of 2011 Wisconsin Act 10, (currently held up in a Dane County court) could reap substantial savings in the future by changing the way overtime is granted, Walker Administration officials have said.
“In some cases, negotiations resulted in overtime provisions that exceeded FLSA requirements or governed how overtime could be assigned; for example, it has generally first been required to be offered to individuals with the most seniority, although forced overtime has first been required to be assigned to the most junior staff,” according to the Bureau. “The extent to which overtime protocols that were in effect during the period we reviewed may change in the future is not known, and in February 2011 the State notified most employee unions that existing contracts would not be extended beyond June 30, 2011.”
Among the audit’s findings:
- State agencies and UW System made $360.5 million in premium, regular, and holiday and other overtime payments from 2006 to 2010
- Premium and regular overtime costs were lower in 2009 than in 2008, although some of the difference can be attributed to the fact that 2008 contained 27 pay periods, while most years contain 26. The increase in overtime payments from 2009 to 2010 was affected at least in part by: 16 mandatory furlough days required of nearly all state employees int he 2009-11 biennium; and a 2.0 percent increase in salaries for represented employees, which took effect in June 2009
- Five state agencies (Dept. of Corrections, Dept. of Health Services, the UW System, Dept. of Transportation and the Dept. of Natural Resouces accounted for 91.1 percent of premium overtime costs from 2006 through 2010
- The Department of Corrections was responsible for 55.3 percent of premium overtime costs during the five-year period
The audit found that in the final years of the Doyle Administration, Departments extended the use of surplus positions, which are intended to be temproary, to keep their overtime needs down.
From the audit:
“During the course of our review, we noted that state agencies have increasingly relied on surplus positions to control their overtime costs and address staffing needs. Surplus positions are intended to be temporary, and s. 16.50(3)(f), Wis. Stats., authorizes their use when “necessary to maintain adequate staffing levels for high turnover classifications, in anticipation of attrition, to fill positions for which recruitment is difficult.” Surplus positions are generally filled by individuals who are hired as permanent employees with the expectation that they will be transferred to vacant authorized positions after they are trained. No additional spending authority accompanies surplus positions: they are expected to be funded with existing agency resources or savings generated by position vacancies.
The LAB included a cautionary note about the use of surplus positions.
“We are concerned that agencies’ increasing reliance on surplus positions to address overtime costs may have limited the Legislature’s awareness of their staffing levels and circumvented its oversight authority under s. 16.505, Wis. Stats.,” the report read “[W]hich with limited exceptions restricts the granting of position authority to laws enacted by the Legislature and actions of the Joint Committee on Finance under s. 13.10, Wis. Stats.”
- DOC spent approximately $5.2 million in FY2008-09 and again in FY 2009-10 on surplus positions that were funded with general program revenue (GPR) and program revenue from penalty surcharges on court fines and forfeitures, which statutes permit to be used for correctional officer training.
- DHS estimates having spent $11.3 million in FY 2008-09 and $10.9 million in FY 2009-10 on surplus positions that were funded in part with federal Medicare and Medical Assistance reimbursements and charges paid by counties and private insurers. We note that daily patient rates at the mental health institutes operated by DHS have increased approximately25.0 percent since September 2008.
The Audit Bureau recommended continued monitoring by state agencies to ensure overtime costs are adequately managed.