Fasano Says State Overtime ‘Still out of control’: could hit $240 million this fiscal year

Article as it appeared in the Republican American Newspaper

State auditors are questioning whether differences in work schedules and rates of overtime pay may be skewing how overtime earnings are being reported and perceived.

Independent Auditors of Public Accounts John A. Geragosian and Robert J. Kane say they are contemplating including reviews of overtime calculations in performance audits of state departments, boards and commissions.

Overtime spending could be on track to top $240 million this fiscal year in the state agencies that the legislature’s Office of Fiscal Analysis tracks on a quarterly basis each fiscal year.

Payments for the 2018 fiscal year increased $23 million over the previous year to $228.2 million.

This 11.7-percent jump reversed a downward trend of the previous three years.

“I think overtime spending is still out of control,” said Senate Minority Leader Leonard A. Fasano, R-North Haven.

The Office of Fiscal Analysis reported expenditures of approximately $120 million through the first two quarters of the 2019 fiscal year, $4.7 million more than previous year’s halfway mark and $18.7 million more than in 2017.

Kane and Geragosian said the reported overtime expenditures may be creating a misimpression that state employees are earning all that extra pay at a higher overtime rate because some straight time is being counted in overtime calculations.
Workweeks vary in state government.

Some union contracts have a 40-hour week, but others have workweeks of 35 hours, 36.25 hours and 37.75 hours.

Overtime is paid at straight time for work hours exceeding the regular workweek but less than 40 hours per week, and time-and-a-half for work hours that exceed 40 hours in a week.

THE DEPARTMENT OF CORRECTION HAS REIGNED as the overtime leader since the Office of Fiscal Analysis started reporting on overtime spending in executive branch agencies and the Judicial Department four years ago.

Slightly more than 4,400 correction officers and other staff were paid $72 million in the last fiscal year, and the OFA reported overtime spending of $38.2 million through the second quarter of this year, $2.6 million more than the same time in 2018.

The union contract for correction officers and other employees in the same bargaining unit sets their workweek at 36.25 hours.

The contractual overtime rate of time-and-a-half applies only to those hours worked in excess of 40 hours.

After recently discussing the department’s overtime spending, Geragosian and Kane said they and members of their office’s performance audit team questioned how much straight time is being counted as overtime pay across state government.

They said they are now weighing the possibility of reviewing how overtime is being calculated in routine performance audits to determine how much extra pay state workers are earning at the higher overtime rate versus straight time.

They had no timetable for making a final call.

WHATEVER THE MIX OF PAY RATES, some of the highest overtime earners are making nearly three times their salary and wages in overtime.
The Office of the State Comptroller maintains a searchable database on employee compensation that details calendar year earnings from salary and wages, overtime and other pay.

A state police sergeant more than doubled her annual salary of $104,876 in 2018, earning $222,307 in overtime pay to lead all employees. The $183,376 paid to the second top overtime earner in the Department of Developmental Services nearly tripled her annual salary of $65,513.
Overtime pay in the Department of Correction in 2018 ranged from $575 to $100,933. Some 2,650 employees of the department earned $10,000 or more in overtime pay, according to the comptroller’s office.

Overtime is used to calculate pensions, and state employees nearing retirement have routinely been able to use overtime to inflate their pay to increase their pensions.

Bills have been regularly introduced to eliminate overtime from pension calculations, but such a change cannot be legislated for now. Pension calculations are enshrined in a master agreement with state employee unions on health and retirement benefits that has been extended through June 30, 2027. Until then, the unions would have to agree to renegotiate any provision.

Unions did agree to cap overtime at 60 percent in a fourth retirement plan that a 2017 concessions agreement established for new hires. The Tier IV plan combines a traditional defined benefit plan with a 401(k)-style defined contribution plan.

FIVE OF THE LARGEST STATE AGENCIES with 24-hour operations have accounted for more than 90 percent of the overtime pay, according to OFA.
In addition to the Department of Correction, the other overtime leaders are the departments of Mental Health and Addiction Services, Developmental Disabilities, Emergency Services and Public Protection, and Children and Families.

The five agencies accounted for $111.6 million of the nearly $120 million in overtime spending that OFA reported through the first half of the fiscal year. Approximately 16,300 employees in three dozen agencies, boards and commissions had overtime earnings, compared to 15,300 through the second quarter of 2018.