Update: Last year PostalReporter.com reported that some USPS Districts are utilizing temporary ‘change of schedules’ to avoid or circumvent paying employees overtime. As noted in two APWU grievance settlements: “Each of the Districts have apparently initiated a policy shift instructing supervisors to discontinue work on employees’ days off in an overtime status. In one such directive. being used for illustrative purposes, the Employer states, in part: …..no employees are allowed to work on their SDO… we will accomplish the tests through the schedule changes utilizing OOS [Out of Schedule] premium instead of full tour SDO [Scheduled Day Off] work pay…” USPS Using Temporary Schedule Changes To Avoid Paying Employees Overtime
For example: In the USPS Walnut Creek, California facility, management involuntarily changed SDOs of seven (7) Full-Time Clerks for a period of six months. The purpose of the change obviously is to provide additional staffing on weekends without utilizing overtime. So, instead of paying the employees 8 hours of overtime for working SDO (six days)–employees are paid 8 hours at the overtime rate without working SDO (five days). Therefore ‘Out of Schedule’ Premium hours and pay are more than likely not reflected in the OIG’s audit report as overtime.
Below are highlights from the USPS OIG Audit on Overtime Usage:
“The Postal Service estimates the net savings from the VERA could be as much as $650 million from FY 2010 through FY 2012; however, because the workload and workforce were not aligned, there is an increased risk the Postal Service may not fully realize anticipated savings.”
We reviewed the Postal Service’s overtime usage in FY 2010 and found it paid $2.86 billion in overtime compared to $2.44 billion in FY 2009, representing an increase of 17.2 percent, or $419.5 million. We also determined that, although overtime usage increased, overall workhours were reduced by 77.3 million and costs by $1.51 billion during this period. According to management, this increase in overtime usage was due to a reduction in personnel, mail rerouting, and equipment deployment delays and updates. We found that these things contributed to increased overtime usage and that the Postal Service did not effectively plan for overtime usage as it exceeded its planned overtime hours by 67.8 percent in FY 2010.
Overtime Usage Increased
The Postal Service’s overtime hours used in FY 2010 exceeded overtime hours used in FY 2009 by 14.3 percent (or 9.6 million hours) at a cost of $419.5 million. In FY 2010, 39,220 employees left the Postal Service (20,897 from the voluntary early retirement authority (VERA)4 incentive and 18,323 through attrition) which contributed to these increases in overtime. While the reduction in personnel was an intended outcome of the VERA, Postal Service officials stated there were places that had more attrition than workload decreases and other places where there was not enough attrition to account for the decreased workload. They also stated that because Article 12 requires the Postal Service to provide up to 180 days notice, whenever possible, before moving employees, they could not match workforce to workload at the onset of the VERA.
In addition, we found that management used overtime to offset the increased workload at network distribution centers (NDC) that resulted from the national network conversion of bulk mail centers to NDCs.5 We also found that the Flats Sequencing System6 (FSS) deployment delays also contributed to overtime usage. See Appendix B for our detailed analysis of this topic.
The Postal Service’s overtime costs in FY 2010 were $2.86 billion compared to$2.44 billion in FY 2009. Total overtime hours increased by 14.3 percent (or 9.6 million hours) at a cost of $419.5 million. In addition, the Postal Service exceeded its planned overtime costs for FY 2010 by $1.15 billion. Overtime workhour costs accounted for approximately 7.0 percent, 5.7 percent, and 8.2 percent of total workhour costs in FY2010, 2009, and 2008, respectively. (see Chart 2)
. In addition, overtime workhours occurred in various functions including mail processing, city carriers, and customer service. Out of the 76,119,321 total overtime workhours, mail processing used 16,554,669; city carriers used 42,150,277; customer service used 11,487,753; and other functions used 5,926,622.
According to Postal Service officials, 20,897 employees took advantage of the VERA incentive. Of these, 18,028 were clerk craft and 2,869 were mail handler craft within the mail processing and customer service functions. From FY 2009 to FY 2010, the Postal Service experienced the most significant increases in overtime in mail processing consistent with the largest reduction in personnel as a result of the VERA.
While city carriers accounted for the largest number of overtime hours, their overtime usage did not increase as significantly as the other functions from FY 2009 to FY 2010.
The Postal Service exceeded its budgeted overtime hours by 67.5 percent in FY 2010
This occurred because management did not account for or make adjustments based on the reduction in personnel, equipment deployment delays or the impact of mail rerouting in the development of their FY 2010 plan. As a result, the budget for overtime and workhours was not accurate and the Postal Service may not have fully realized the anticipated cost savings resulting from the VERA and other operational efficiencies.Postal Service officials stated that they developed the FY 2010 plan during April and May 2009 and the VERA was not announced until August 2009.
Management did not adjust the plan based on anticipated personnel reductions associated with the VERA and, as a result, they did not budget for the additional overtime required to offset those reductions and maintain operations.With regard to mail rerouting, management stated they expedited their plans for rerouting the mail for the NDC conversion and redirected a large volume of mail to Pittsburgh, PA; Des Moines, IA; Denver, CO; and Memphis, TN facilities in a short period of time and used overtime to keep processing that mail.
Lastly, management stated the FY 2010 budget included savings from workhour reductions they expected to achieve from the deployment of FSS; however, since deployment was delayed, the Postal Service did not realize workhour savings.Headquarters officials held meetings with field personnel regarding FSS deployment and delays and provided a schedule showing delays beginning in mid-FY 2009. The mission of the budgeting process is to help management make informed choices about the provision of services and capital assets and to promote stakeholder participation in the process.Management should continually evaluate the program and financial performance and make adjustments that encourage progress toward achieving goals.
Management had knowledge of each of these changes prior to the beginning of the FY 2010 budget period and could have made the necessary adjustments to the budget to account for the impact on operations and overtime usage.