State workers and their crazy-high non-wage payouts

We're talking overtime, unused vacation time, and a maze of extra compensation that added up to $1.7 billion last year. That's enough to fund the average salaries of 25,000 teachers. A nurse at a men's prison, for example, made almost $270,000 last year - triple her regular pay. Prison guards are given a $130-a-month fitness bonus for annual physical exams, even if they aren't fit. Workers at the Department of General Services receive a $10,000 annual bonus for "exceptional performance." It's nonsensical, but the Democratic-controlled legislature isn't rushing to make any adjustments. From Bloomberg:

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."


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.

No argument about using overtime as a way of leveraging limited resources. But what's at issue here is not pragmatic leveraging - it's a largely union-inspired effort to game the system. Wonder if those Wall Street protesters are being clued in - they might be surprised at who has been ripping them off.

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Mark Lacter
Mark Lacter created the LA Biz Observed blog in 2006. He posted until the day before his death on Nov. 13, 2013.
Mark Lacter, business writer and editor was 59
The multi-talented Mark Lacter
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