The Postal Service, which is in a dire financial situation, has paid a significant number of its workers more in overtime than in regular pay throughout recent years, according to a government watchdog.
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According to a report from the USPS Office of Inspector General, during fiscal 2019 USPS exceeded planned and penalty overtime hours by nearly 14 million cumulative hours – and incurred $521.6 million in “questioned costs” as a result.
Regular overtime is paid at a rate of 1.5 times a worker’s hourly rate and penalty overtime is double the hourly rate.
Between fiscal 2014 and fiscal 2019, USPS paid $25.8 billion in total overtime costs, with fiscal 2019 recording the highest payments out of those years.
As of fiscal 2019, 42 percent of the Postal Service’s 633,108 employees had unauthorized overtime.
There were an increasing number of employees over the observed time period who earned more in overtime pay than regular pay. Between fiscal 2014 and 2019 that figure rose by 3,250 people – or by nearly 430 percent. The total overtime pay to these employees increased by 441 percent, to $199 million.
“Although package volume grew, overtime costs and hours trended upward and consistently exceeded their planned overtime budgets from FY 2014 to FY 2019, despite declining mail volume and increased employee levels,” the report said. “In addition, management did not always effectively manage their unauthorized overtime or ensure they had complete, accurate, and reliable employee payroll workhour data.”
In a response included in the report, USPS executives said the agency is committed to minimizing costs, but that in some cases overtime may be necessary to “meet service standard commitments and obligations for mail delivery.” Executives also said the cost of an overtime hour in some cases may also be less than a “straight-time hour” due to benefits and the flexibility overtime offers.
Meanwhile, Postmaster General Louis DeJoy’s recent written testimony before the House Committee on Oversight Reform acknowledged that overtime is costly to the agency, which has not turned a profit in years.
“Overtime has also been a source of substantial cost, and it is to a certain extent reflective of inefficiency in our operations,” DeJoy said, while adding that overtime levels have been relatively consistent since he joined the agency in June.
The Postal Service reported a net loss of $2.2 billion in the third quarter. It is in a “financially unsustainable position absent significant” change, according to DeJoy.