According to reports filed with the Postal Regulatory Commission USPS paid out $964,756,219.13 in overtime during the first quarter of 2012 fiscal year . Last year during the same period USPS paid out over $980 million. USPS attributed the $980 million to reduction in personnel (VERA and attrition) , mail rerouting, and equipment deployment delays and updates.
City Letter Carriers attributed to over 50% ($506,449,078.60) of the total amount. Almost $180 million of that amount was paid out in the month of December.
Clerks attributed to over 20% ($221,667804.86) Over $100 million of that amount was paid out in the month of December.
Mail Handlers over 12% ($117,214,082.93) Almost $50 million of that amount was paid out in the month of December.
See chart below – the second column is the Month Beginning Balance from October and November 2011
As PostalReporter reported last year, the overtime amount could be higher if not for USPS management utilizing involuntary temporary change of schedules.
Also USPS Paid out $28,376,044.47 in Arbitration Awards
Postmasters – $60,099.36
Clerks - $12,749,283.54
MAIL HANDLERS -$1,415,421.14
RURAL Carriers – $459,578.38
CITY Carriers- $10,454,205.26
VEH OP – $192,125.88
BLDG SER -$1,129,078.57
Vehicle Maintenance – $64,797.97
Beginning Nov. 23, 2011, mandatory overtime will end for many APWU-represented employees.
In accordance with the 2010-2015 Collective Bargaining Agreement, full-time regular career Clerk Craft and Motor Vehicle Craft employees who work in an installation and functional area with Non-Traditional Full-Time assignments cannot be required to work overtime (except in an emergency), unless they are on the Overtime Desired List. If just one clerk in any station or branch occupies a NTFT duty assignment, clerks working in Function 4 throughout the installation cannot be required to work mandatory overtime unless they are on the OTDL. If only one clerk in mail processing occupies a NTFT duty assignment, then no non-OTDL clerks in Function 1 can be required to work mandatory overtime.
There is no “December exception” for this mandatory overtime prohibition.
“Emergencies” are defined in Article 3 as, “An unforeseen circumstance or a combination of circumstances which calls for immediate action in a situation which is not expected to be of a recurring nature.”
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.
Postal Service could have avoided paying almost 7 million of the 28 million overtime hours for full-time city letter carriers
Our analysis identified that, during FY 2009, city delivery supervisors scheduled full-time city delivery carriers to use overtime hours to deliver the mail on city routes.
Management actually expended overtime hours at a cost of more than $282 million, rather than use available and lower-cost PTF and transitional straight-time workhours at a cost of about $160 million. Using the lower cost employees would have saved approximately $122 million (see Table 1).
City Delivery Workforce Planning
The Postal Service’s workforce planning for city letter carriers did not always optimize its resources by maximizing the use of available and lower-cost part-time and
transitional carriers to reduce overtime costs for delivering the mail. Based on workload trends, vacancies, absences, and mail volume, supervisors decide either to use
overtime with full-time carriers or staff routes with part-time or transitional city letter carriers to ensure mail is delivered on routes.
The U.S. Postal Service is delivering fewer pieces of mail to a growing number of addresses as new households and businesses are added to the delivery network each year. During the past 3 years, the Postal Service reduced its city letter carrier workforce and workload; however, financial losses continue to occur while salary and benefits will continue to increase. The Postal Service must achieve unprecedented levels of efficiency to accommodate this new growth while facing financial loss from declining mail volume.
The Postal Service’s workforce planning process for city letter carriers did not always optimize available resources. In fiscal year (FY) 2009, the Postal Service could have avoided paying almost 7 million of the 28 million overtime hours for full-time city letter carriers by maximizing available, lower cost carrier resources to deliver the mail.
City Delivery Workforce Planning
Delivery management often used full-time city delivery carriers in overtime status to deliver the mail when using lower cost part-time and transitional carriers would have been more economical. Based on workload trends, vacancies, absences, and mail volume, supervisors decide either to use overtime with full-time carriers or staff routes with part-time or transitional city letter carriers to ensure mail is delivered on routes.
Postal Service Headquarters and area officials have implemented initiatives aimed at improving delivery operation performance including reducing managers’ daily administrative burdens,1 implementing new staffing tools, and improving daily communication of office operations. Moreover, area officials have primarily focused on increasing route efficiency and reducing overall workhours. However, management has not fully developed an overall city delivery operations strategy that optimizes resources and focuses on the type of workhours used and the associated staff costs to deliver the mail on city routes. See Appendix B for our detailed analysis of this topic.
By not optimizing all city carrier staffing resources, the Postal Service unnecessarily incurred excess costs of over $153 million in FY 2008 and approximately $122 million in FY 2009. Additionally, operating costs of more than $275 million could be reduced over a 2 year period (FYs 2010 and 2011). See Appendix C for our monetary impact calculations.
We recommend the vice president, Delivery and Post Office Operations:
1. Collaborate with area management to develop and implement an overall city delivery operations strategy that optimizes the most cost-effective combination of full-time, part-time, and transitional city carrier resources to reduce overtime workhours and costs.
It appears management officials in many USPS offices across the country are using “temporary schedule changes” to avoid paying Postal Employees overtime. There are also reports that USPS is using Full-time Regular employees like Part-Time Flexibles. Here are two Western Region grievance settlements “Temporary Schedule Changes to Avoid Overtime (PDF)” that may be of interest to readers which states:.
“Management may not schedule employees for the purpose of intentionally circumventing overtime desired list provisions.”
“Management initiated temporary schedule changes should be the exception rather than the norm, and not on a regular or recurring basis. These schedule changes are to be made for a pre-determined duration and used to cover operational needs.”
Out of Schedule Premium Pay
Out-of-schedule premium is paid to eligible full-time bargaining unit employees when they work on a temporary schedule at the request of management.
Notice of a temporary schedule change must be given to an employee by Wednesday of the preceding service week. If the notice is timely, the employee’s work can be limited to the hours of the revised schedule. Out-of-schedule premium is paid for hours worked outside of, and instead of, his or her regular schedule.
Noncompliance with the Notification Requirement:
If notice of a temporary schedule change is not given to the employee by Wednesday of the preceding service week, the employee is entitled to work his or her regular schedule. Hours worked outside of the employee’s regular schedule are then not worked “instead of” but “in addition to” the regular schedule. The additional hours worked are not considered out-of-schedule premium hours but overtime hours worked in excess of eight hours per service day or 40 hours per service week.
Eligible employees do not receive out-of-schedule premium when any of the following conditions apply:
Training – Employees attending a recognized training session.
Request of Employee – The employee requests the schedule change for personal reasons. The employee’s supervisor and shop steward or other collective bargaining representative must agree to the change. The employee is responsible to complete PS Form 3189, Request for Temporary Schedule Change for Personal Convenience, and obtain all required signatures.
Request of Employee – The employee requests changes to accommodate intermittent leave or a reduced work schedule for family care or a serious health problem of the employee. (See FMLA.)
Tardiness – The employee is allowed or directed to make up time missed because of tardiness in reporting for duty.
Detail Assignments – When the employee is detailed to:
- Postmaster position as officer-in-charge
- Rural carrier position
- Ad hoc position that requires an irregular schedule when the employee applied and was selected for it
- Any non-bargaining position, if the employee is in the clerk, maintenance, motor vehicle, or materiel support craft
- Bargaining or non-bargaining position in grade 19 or above
source for portions of this article: USPS, APWU
Excerpts from the OIG Audit Report On USPS Overtime Workhours:
This report presents the results of our self-initiated audit of Postal Service Function 4 Overtime Workhours (Project Number 09RG009MS000). Our objective was to determine whether Postal Service officials effectively managed Function 4 workhours to reduce overtime costs. This audit addresses financial and operational risk.
Footnote: Function 4 operations include customer service activities – both supervisory and nonsupervisory – of employees at post offices, stations, and branches involved in automated, mechanized, manual, and post office box distribution of mail, post office window, and vending equipment services and miscellaneous administrative and Central Forwarding System operations
Postal Service officials effectively managed Function 4 workhours to reduce overtime costs. Overall Function 4 overtime workhours decreased from 17.5 million in fiscal year
(FY) 2008 to 9.2 million in FY 2009. However, unauthorized overtime workhours as a percentage of total overtime workhours increased from FY 2008 to FY 2009.
Management should strengthen time and attendance procedures to reduce Function 4 unauthorized overtime costs. We estimated that in FYs 2008 and 2009, the Postal
Service incurred unrecoverable unsupported questioned costs totaling $79.6 million for unauthorized overtime workhours.
Time and Attendance Procedures Need Strengthening
Some Function 4 employees clocked in before and clocked out after their assigned workhours, resulting in 1.2 million and 965,000 unauthorized overtime workhours for FYs 2008 and 2009, respectively. This occurred because the Postal Service’s badge control process does not prevent employees from clocking in before and clocking out after their assigned workhours. In addition, managers and supervisors did not follow established time and attendance procedures. Officials stated they did not follow procedures because other duties took priority. Specifically, they did not always:
- Control employees’ access to time cards and badges to ensure they clocked in and out according to their assigned schedules;
- Update the Time and Attendance Collection System (TACS) to reflect changes in employees’ scheduled work times; and
- Record authorized overtime in TACS to reduce the amount of unauthorized overtime recorded in the TACS Unauthorized Overtime Report.
We previously recommended the vice president, controller, assess the feasibility of automating the badge control process with the Electronic Badge Reader (EBR) and TACS to prevent employees from clocking in before their official workhours begin.
Although management identified two automated solutions to prevent employees from clocking in before and clocking out after their assigned workhours, they decided against
these options in favor of using the TACS reports to identify employees clocking in before normal workhours. Management indicated that the reports were sufficient to
effectively and efficiently manage clocking activity.
We interviewed 13 finance managers from high-performing district offices in the Eastern and Pacific Areas to determine the reasons for their success in controlling unauthorized
workhours and to develop best practices. Districts in the Eastern and Pacific Areas incurred the fewest Function 4 unauthorized overtime workhours in FYs 2008 and 2009.
These districts were successful in controlling unauthorized workhours because their managers and supervisors substantially complied with established time and attendance
procedures. The districts provided their managers and supervisors training on time and attendance procedures, provided overtime reports for them to use to manage
workhours, and held frequent meetings to discuss overtime workhours.
FY 2010 Casual Exception Period Set
Article 7.1.B.5 of the 2006 National Agreement provides exceptions to the six percent and 11 percent casual caps during accounting periods 3 and 4. For Fiscal Year 2010, the casual exception period will be from Nov. 21, 2009 through Jan. 15, 2010.
2009 Penalty Overtime Exclusion Period Set
The December period referenced in Article 8, Sections 4 and 5, of the National Agreement, during which penalty overtime regulations are not applicable, consists of four consecutive service weeks. (See Why Is the Penalty Overtime Exclusion Period Only 28 Days?) This year the period begins Pay Period 26-09, Week 1 (Dec. 5, 2009) and ends Pay Period 1-10, Week 2 (Jan. 1, 2010).