Nurse Making $269,810 Demonstrates California’s Overtime Binge
By Michael B. Marois - Oct 26, 2011 12:01 AM ET
California Warns State Prison
Employees They May Be Fired
California
runs the nation’s largest correctional system, with about 161,000 inmates. The U.S. Supreme
Court, citing overcrowding and inadequate health care, ordered the state to
reduce the prison population by 33,000 in two years. Photo: Justin
Sullivan/Getty Images
California runs the nation’s largest correctional system,
with about 161,000 inmates. The U.S.
Supreme Court, citing overcrowding and inadequate health care, ordered the
state to reduce the prison population by 33,000 in two years. Photo: Justin
Sullivan/Getty Images
Collective-bargaining
rights granted to state workers by Governor Jerry Brown, a 73-year-old
Democrat, when he first held the office three decades ago made it more
difficult to pursue cost-cutting measures such as eliminating extra pay
allowances or privatizing prisons.
Collective-bargaining rights granted to state workers by
Governor Jerry Brown, a 73-year-old Democrat, when he first held the office
three decades ago made it more difficult to pursue cost-cutting measures such
as eliminating extra pay allowances or privatizing prisons. Photographer: Ken
James/Bloomberg
Jean Keller earned $269,810 last year working as a nurse at
a men’s prison on California’s central
coast by tripling her regular pay with overtime hours.
Keller got more overtime in 2010 than any other state
employee. In all, California’s
public workers collected $1.7 billion of extra pay last year, more than half of
it in overtime, state payroll data show. The rest was for unused vacation and
union-negotiated benefits such as uniform allowances, physical-fitness
incentives and special compensation in recognition of a “complex work load.”
“It’s outrageous,” said 29-year-old Gilbert Ramirez, one of
about 30,000 teachers fired in California
since 2007 because of budget cuts. “It boils my blood that I’m out of work and
they claim they don’t have enough money to pay me.”
California paid the
additional wages -- enough to fund the average salaries of about 25,000 teachers -- as
it faced a $19 billion deficit and cut school spending and services for poor
children and the elderly. The state may have to trim the academic year by seven
days and eliminate some student busing if revenue shortfalls persist.
The extra compensation underscores a broader trend in California, where
government workers are paid more than in other states for similar duties. Among
them: city managers whose pay is higher than the governor’s, prison doctors who
make more than counterparts in other states and Los Angeles firefighters who
collect twice the national mean.
Pay Differentials
Union-negotiated “pay differentials,”
requirements that workers take monthly furloughs and staff cuts that heaped
extra work onto remaining employees combined to inflate overtime and other
non-salaried pay, the data show. So did inefficiencies in management of state
departments, said Dan Pellissier, a deputy cabinet
secretary under former Governor Arnold Schwarzenegger.
“It’s just a mess,” said Pellissier,
now head of a group pushing for changes in public employee pensions. “The way
the state establishes its pay classifications is very complex and often
obscure. What we need is transparency and disclosure and a fair accounting of
what those costs are so we know if we are paying the right amount for labor.”
Among those who got large payouts are a prison doctor who
cashed out more than $590,000 of vacation time when he retired, a computer
specialist in the Legislature’s legal office who got $61,905 in overtime on top
of his $71,560 salary, a psychiatrist for the Developmental Services
Department who received $97,700 in extra-duty pay and the head of
the state gambling commission, who banked $169,623 in unused holiday pay.
Collective Bargaining
Collective-bargaining rights granted to state workers by
Governor Jerry Brown, a
73-year-old Democrat, when he first held the office three decades ago made it
more difficult to pursue cost-cutting measures such as eliminating extra pay allowances
or privatizing prisons.
Union-backed provisions, among other things, allow employees
to collect as much as $1,200 in “arduous duty” pay for projects requiring long
hours and, in the case of prison guards, receive a $130-a-month fitness bonus
for getting annual physical exams, even if they aren’t fit.
“I’m so angry as a taxpayer,” said Marilyn Cohen, chief
executive officer of Envision Capital Management in Los
Angeles, who manages $250 million of fixed-income assets, including
California
debt. “This makes me sick. I don’t know what it is going to take for this state
to come to its Jesus moment.”
Unpaid Days Off
State rules allow employees to cash out unused vacation at
their highest salary levels regardless of when the time was accrued.
Cash-strapped departments have held off hiring new staff, pushing existing
workers to put in extra hours to get the jobs done.
Three unpaid days off each month, instituted by
Schwarzenegger, helped depress regular wages paid last year and forced overtime
compensation for employees, such as prison guards, who had to work through
them. The first six months of the furloughs, for
instance, cost California
$52 million in accrued vacation time for prison guards alone, according to
findings by the state Senate Office of Oversight and Outcomes.
New York also paid its employees more than their
normal pay in 2010 -- though less than in California. New York
state workers took in about $1.5 billion above regular pay, or about $9,348 per
employee on average, compared with $10,643 in California, a comparison of the states’ pay
databases shows.
In California,
the amount of extra compensation grew from $1.67 billion in 2008 to $1.7
billion last year. In 2007, the year the state budget reached its record high, employees got $1.9 billion in additional pay,
according to the California
controller’s office.
Payroll Costs
The government has tried to curb its payroll costs,
including a hiring freeze ordered by Brown in February. California now has the
fourth leanest state workforce in the U.S., behind Florida, Arizona and
Illinois, at about 11 state employees for every 1,000 residents, according to
2009 data from the U.S.
Census Bureau. The state paid $906 million in overtime last year, nearly
three-quarters of it in agencies where staffing is required around the clock,
such as prisons, mental- health hospitals and the highway patrol.
“The hiring freeze put in place by the governor has
prevented the state from hiring as many employees as it could have, which has
reduced the overall state employment level,” Elizabeth Ashford, a spokeswoman
for the governor, said in an e- mail. “This has saved the state millions and
millions of dollars.”
Largest Union
Service Employees International Union Local 1000,
the largest union of state employees in California with about 95,000 members,
agreed to concessions last year aimed at reducing overtime, spokesman Jim Zamora said.
State workers, for example, used to be able to collect
overtime anytime they worked certain holidays such as Martin Luther King Day,
Cesar Chavez Day or the day after Thanksgiving. Now they can only collect the
extra pay if the holiday is in addition to a full week of work. State workers
also must pay more toward their own pensions, Zamora said.
“We entered the collective bargaining process with an open
mind and a desire to help the state work though its financial problems and to
make things work,” Zamora
said.
In addition to the overtime, state workers in California collected
$472 million last year in bonuses and extra compensation
for additional duties and qualifications such as speaking more than one
language, obtaining a commercial driver’s license or having to make a
presentation to the governor, the payroll data show.
Additional Wages
California unions have
secured almost 400 pay differentials granting additional wages to state
employees.
Certain workers at the Department of General Services, for
example, are eligible for a $10,000 annual bonus
for “exceptional performance.” Some accountants working at San Quentin prison
outside San Francisco
get $200 a month as a retention bonus on
top of their $3,209 maximum monthly salary. Hydroelectric plant workers get an
extra $1.10 an hour to work rotating shifts, in addition to the $32 to $38 an
hour a senior operator typically makes.
Workers tasked with fielding phone calls
from the public at the Consumer Affairs Department earn an extra $100 a month
“in recognition of the complex work load and level and knowledge required to
receive and respond to consumer calls.”
Besides overtime, extra-duty pay and bonuses, state workers
got payments totaling $293 million, mostly for unused vacation and accrued
leave. The state also paid out $25 million more to 74,000 workers for fringe
benefits such as uniform allowances and mileage.
New York Pay
California will spend 8
percent of its $86 billion general- fund budget this fiscal year on wages. In New York, by comparison,
payroll expenses will
account for 9.8 percent of the $56.9 billion budget.
The average state worker in California made $58,340 in total pay last
year, according to data provided by the controller’s office. Per-capita income
for all employees in California, public and
private, was $42,578, the U.S. Commerce Department
said.
The state pays employees time-and-a-half for overtime.
That’s still cheaper than hiring an additional worker full time to cover the
overtime hours, because the state would also have to pay the new worker
benefits that can equal one-third of salary, says Lynelle
Jolley, spokeswoman for the Personnel Administration
Department.
“When you look at individual employees, some of them rake in
a lot of money, but from the employer’s perspective you have to ask is that
cheaper than paying to have someone else on the payroll,” she said.
Prisons, Mental Health
More than half of the overtime was accrued by just two state
agencies: prisons and mental health, both of which must operate around the
clock with required staffing levels.
Keller, the nurse at a prison near San Luis Obispo who
tripled her pay with overtime, worked 2,450 extra hours in 2010, or 102 full
days. Some of that was required overtime, though she volunteered
as well, said Nancy Kincaid, spokeswoman for the federal court-appointed
receiver that runs California’s
prison health-care system.
Keller wasn’t alone. Nurses working in California’s crowded prison
system earned $54 million in overtime in 2010, an average of $13,600
each, in addition to their regular pay. Nurses working in mental health
hospitals got $41 million more in overtime. Through her supervisor, Keller
declined to comment.
‘Meet That Minimum’
“When you run a 24-7 health-care facility, you are required
in order to have your license to have a certain number of staff,” Kincaid said.
“You have to meet that minimum. So if you don’t have enough staff to cover for
vacations or when someone is sick, then you have to go to registry or someone
has to work overtime.” Registry refers to hiring temporary nurses.
California state employees
can cash out unused vacation when they resign or retire. The practice of
banking such pay for retirement is so prevalent that the Personnel
Administration Department keeps a Lump Sum Separation Pay
Calculator on its web page.
State policy says workers shouldn’t accumulate more than 640
hours of vacation time, yet many do. When workers breach the cap, managers are
supposed to develop a plan to draw down the time. But the law doesn’t forbid
employees from banking the hours, and state data show
that many take more than 640 hours worth of pay when they leave.
Terri Ciau retired last year as
the executive director of the California Gambling Control
Commission and cashed out $169,623 in vacation time she had banked
during her career. She declined to comment.
‘Within the Rules’
“It was strictly within the rules,” said 65-year-old Jay Wickizer, a retired section chief for the Department
of Forestry and Fire Protection said of his own $294,440 vacation
payout when he left last year at a salary of $83,100. “Sometimes you just don’t
have the time to take vacation.”
Fong Lai, the retired prison doctor who got $590,000 in
vacation pay, couldn’t be located for comment. Matt Hazel, the computer
specialist who received $61,905 in overtime, and Daisy Demaranville,
the psychiatrist who collected $97,700 in extra- duty pay, weren’t unavailable
to comment, their supervisors said.
Schwarzenegger, a Republican who often battled with unions
over contracts, won concessions last year with 150,000 state workers that
require them to contribute between 2 percent and 5 percent more toward their
own pension benefits and increased years of service to qualify for full
benefits.
Brown struck similar deals with 51,000 more employees
earlier this year.
Unlimited Accumulation
Those compacts allow guards to accumulate an unlimited
amount of unused vacation and sick leave. The guards had faced an 80-day cap on
how much they could bank, though in practice the cap was ignored to maintain
minimum staffing levels amid mandated furloughs.
Brown’s deals also cut state worker pay by about 4.6 percent
in the current fiscal year through an unpaid day of leave once a month. Yet
employees already in the top range of their salaries would get a pay increase
equal to their higher pension contributions beginning next year.
“It’s fiscal insanity,” said
Assemblyman Tim Donnelly, a Republican from Hesperia, criticizing “this notion
of spending money and paying people more than we need at a time when every
department is broke, when we are starving our local schools and we are cutting
public safety.”
Hiring Freeze
The governor has taken other steps to curb payroll costs. In
February he imposed a statewide hiring freeze, one
part of an effort he said could trim $363 million in operational costs this
year. He also said he will propose a package of reforms to state and local
government pensions. Brown ordered state workers to hand in half of the 96,000
government-paid mobile phones and reduce the fleet of 13,600 vehicles by half.
The state’s $1.7 billion in 2010 non-salaried pay “includes
all the various forms of disability pay as well as hundreds of different kinds
of add-ons to pay that range from recruitment incentives for hard-to-recruit
areas, education differentials, night-shift differentials, bilingual pay,
hazardous duty pay, etc.,” Ashford, Brown’s spokeswoman, said by e-mail.
Ramirez, the Los Angeles teacher who lost his job in 2009,
lived off unemployment benefits until they ran out. He postponed his wedding
and said he almost became homeless before his brother agreed to let him sleep
in a spare room.
“Outrage would be the word,” Ramirez said. “They confiscated
my career.”
To contact the reporter on this story: Michael Marois in Sacramento
at mmarois@bloomberg.net;
To contact the editor responsible for this story: Mark Tannenbaum at mtannen@bloomberg.net.
http://www.bloomberg.com/news/2011-10-26/nurse-making-269-810-demonstrates-california-s-overtime-binge.html