Overtime: The Good, the Bad and the Unsafe
It's important to know when overtime is a smart financial decision and when it's better to send employees home.
News coverage often casts overtime in the public sector as abuse or bad management. Typical is this recent article from the Boston Herald that points to one worker who received $171,000 in overtime last year, “pushing his salary north of $300,000.”
Admittedly, that’s an extreme case. But somewhat more common are instances of so-called “pension spiking” -- a ploy used in some places to dramatically increase an employee’s retirement wages. Since retirement pay is frequently based on a person’s last few years of work, boosting their overtime toward the end of their employed life can yield a much more comfortable retirement.
Some cities and states are trying to cut down on pension spiking, but overuse of overtime in general continues to be a major problem for many governments.
In early April, for example, California’s Little Hoover Commission revealed that the 14,000-plus psychiatric technicians and nurses in the state were working 3.75 million hours of overtime at a cost of nearly $180 million. That’s over $12,000 extra a year, on average, and represents 18.2 percent of their total pay. “That’s four times the percentage of pay for registered nurses and health-care workers nationally,” according to the report.
It’s important to understand, though, that all overtime isn’t a bad thing. Some experts in the field of management draw a distinguishing line between so-called “good overtime” and “bad overtime.”
Good overtime can generally be anticipated by budgeters -- even if it’s difficult to do so precisely. They can, for instance, predict a certain number of sick days and plan for overtime when they occur. As Rock Regan, a director at Kronos, a workforce management consultancy, explains, “It’s the unplanned overtime that’s typically what you tend to see in the papers.”
A classic example of good overtime occurs in sanitation departments, which are responsible for clearing snow. When a blizzard hits, cities obviously need more manpower than they have to run the snowplows. As a result, the use of overtime to clear the roads is not only sensible but necessary. In situations like this, overtime may actually be a cheaper alternative than hiring enough full-time staff because new employees require additional benefits and training, which can equal (or exceed) the costs of paying a person time-and-a-half for a reasonable period.
The distinction between good and bad overtime, however, travels beyond fiscal planning. Overtime can create safety problems for public workers and the citizens using their services.
Consider the case of a firefighter who works an 8-hour shift and is then asked to work another 8 hours of overtime. That’s 16 hours in a demanding job that requires attention to detail. By the time the firefighter commutes back and forth, eats something and tends to the needs of their family and friends, that leaves just a few hours of sleep before the next shift. Is that the person you want administering the highest levels of care in an emergency? Probably not.
Of course, there are some legal limitations to how long people can work. The federal Fair Labor Standards Act, for example, requires firefighters to be off for at least 12 hours in any 60-hour period of time. But such restrictions still leave the possibility open for overwork and eventually burnout.
Then there’s quality of work life. The Washington 2015 Employee Engagement Survey showed that “agencies where more employees are using overtime are more likely to have lower employee engagement scores.”
On the flipside, some employees regard overtime as a privilege that helps enhance their paychecks. That’s why it’s important to make sure those hours are doled out fairly. Technology can help.
In Cincinnati, a recent audit of the police’s process for manually entering overtime uncovered overpayments, inconsistencies and even instances “where overtime data was entered into the system prior to the officer working the overtime assignment and prior to receiving a supervisor’s approval,” said Cincinnati Police Chief Eliot Isaac. “This system,” he said, “subjects the entire process to human error.”
This story has been updated.