MTA Targets Overtime for Cost Savings
The MTA's efforts to overhaul how we do business continued this week with the announcement of plans to reduce overtime costs by $22 million in 2010 and $60 million annually starting in 2011. While some overtime is critical to service, the MTA has committed to reducing the unnecessary portion of its $560 million annual overtime expense.
A recently completed internal review found that outdated and inflexible work rules result in some employees being paid when they're not working. Employee absenteeism and loading up on overtime to increase pensions also contribute to significant amounts of unnecessary overtime. MTA management has not consistently focused on limiting unnecessary overtime and has now committed to a series of tighter management controls that will lead to the cost reductions, but it cannot be done alone. The savings the MTA projects for 2011 can only be achieved in partnership with labor unions.
"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," MTA COO Charles 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."
The agency identified a number of examples of unnecessary overtime:
- Locomotive engineers at the LIRR receive an extra day's pay for switching between electric and diesel equipment without working one extra minute.
- A local Queens bus driver gets 12.5 hours pay for eight hours of service, including 6 hours of paid "swing time."
- In addition to 37 holiday and vacation days, a quarter of represented NYC Transit employees take 15 or more sick days each year. These shifts must also be filled on overtime. A common example is a Train Operator who took two unpaid sick days but made a full week's pay by working overtime on three other days.
- Some employees load up on overtime to increase pensions. For example, an MTA Bridges and Tunnels employee who retired in 2007 used overtime to double his pension – which exceeded his annual base pay of $53,000. He is paid $73,000 a year in retirement, due in part to working 35 shifts of 16 hours or more in his final year.
Management hasn't consistently focused on limiting unnecessary overtime. For example, bus repairs at Castleton Depot cost $2 million more each year than the same repairs at Flatbush Depot because of unnecessarily high overtime usage at Castleton. Lower productivity means the same air conditioner maintenance job takes 8-12 hours at Flatbush but 16-24 hours at Castleton.
Management has also tolerated unproductive mega-shifts. LIRR employees work continuous tours of duty enabling, for example, a crew dispatcher to earn over $233,000 in 2009 when the base pay was $80,041. The employee worked 16 hours a day for 5 consecutive days 10 times during this period, totaling 180 days where more than 16 hours was worked during 2009.
The actions to reign in overtime costs include:
- Closely monitoring shifts greater than 16 hours to reduce double-time payments, ensure productivity and limit pension padding.
- Aggressive enforcement of sick leave abuse.
- Bi-weekly reporting to agency presidents of overtime and explanations for variances at monthly committee meetings.
- Specialized task forces and more intensive reporting in high usage areas.
- Engage with labor to begin the discussion about changing work rules that lead to unnecessary overtime.
This week's announcement follows earlier announcements about MTA efforts to reduce administrative payroll, eliminate half of the projects in our operating budget, renegotiate with key suppliers and reduce agency costs.