9/10/07

Sweet monopoly deals for Ohio unions

As Ohio labor laws stand, only government workers — not those working in private business — have an option that allows them to receive overtime pay or carry overtime hours in compensatory time to be taken later.

The policy of allowing employees to carrying vacation time, sick time and compensatory time — something some refer to as a taxpayer-funded liability — is one some experts say doesn’t make good business sense.

With the exception, for example, of Warren city firefighters, who are required to take overtime instead of compensatory time, Warren employees to date are owed 27,980 hours of compensatory time, which according to state law has to be used over the next three years or the time is considered lost. That equates to about 13.5 total years of time off or about $646,081.63, according to records obtained by the Tribune Chronicle.

Under a labor contract between Trumbull County and one of its largest unions, AFSCME Local 2493, employees may receive cash for their balance of comp time at the end of every year. With the exception of the county’s maintenance department, for which overtime balances weren’t immediately available, records show AFSCME Local 2493 employees could cash out more than $27,000 today if they so opted.

Those same employees have the option of cashing in up to two weeks of vacation time at the end of the year. If an employee chooses to work, and be paid for those two weeks and then cash in at the end of the year, he or she would essentially be paid twice for those weeks.

If each eligible employee decided to cash in the allowable vacation hours, it would cost the county about $184,159.

"That (vacation and sick time carry-over as well as compensatory time) is public sector entitlements that has gotten really out of hand," said Michael Creatore, who is a financial adviser in the private sector and the Austintown Board of Education president in the public sector.

"In the private sector companies can only afford to do for their employees based on profits of the company. It’s not like that in the public sector. They think they can just go back to taxpayers to fund their request."

Mike Villano, an accounting and finance faculty member at Youngstown State University as well as the auditor for the city of Hubbard, said compensatory time also is a liability because an hour earned today is worth more in the future. Ohio law states that when an employee retires, the unused time is cashed out at the rate the employee is earning at the time of severance.

"You’re not paying the 2007 rate, you’re paying the 2025 rate," Villano said.

Numerous bills have been introduced in both the Ohio House of Representatives and Ohio Senate over the years to give those in the private sector the same opportunity, but have failed. Some of the most recent companion bills died without even making it to committee.

But whether the option ever becomes allowable under Ohio law, it’s questionable whether managers in private Ohio companies and industry might ever allow workers to carry comp time because of the liability it would create on company books.

It’s the competitiveness of private business that drives companies to work harder to control their costs — something government leaders don’t have to worry about, according to Reid Dulberger, executive vice president of the Youngstown Warren Regional Chamber, who works with local business and development issues.

"Government is by its nature, a monopoly. There are very few monopolies left in the private sector and if it is, it’s very heavily regulated. Businesses are in competitive markets and are therefore forced to control costs," Dulberger said last week. "They (private businesses) are forced to constantly seek to improve efficiencies. If they don’t, someone else is going to come in and provide another product at a lower cost and put them out of business. That’s not true in government because there is no competition. We don’t put government out of business. There is no pressure to constantly innovate and constantly control cost."

Trumbull County Human Resources Director James Keating argues, though, that compensatory time makes sense because it gives individual departments leverage in how they pay their employees.

"Some things are better in the private sector, but the reverse is true too ... If you’re paying out overtime as cash and you’re cash-poor, that’s a detriment to the entire county budget," Keating said.

Employees in the Warren Police Department can accrue a maximum of 480 hours of compensatory time, while other departments max out at 240 hours, according to the Ohio Revised Code. Any additional time is considered lost.

Warren city Auditor David Griffing said employees do have the option of cashing out their compensatory time and all time off must first be approved by their department head.

"There are clauses in the contracts that prevent everyone from taking off at the same time," Griffing said.

Warren Operations Director Frank Tempesta, whose department is regularly called out for overtime, said the decision when to take time off is made on a case-by-case basis, but said there are restrictions on the number of employees allowed off at one time.

"It’s their time and they can take it whenever they want to as long as we don’t have too many people off that day and it doesn’t interfere with the operation of the department," he said.

Trumbull County departments also have controls on the amount of compensatory time employees can carry.

Under AFSCME Local 2493’s contract, employees are capped at 60 hours for the year, which wipes clean at the end of the year. With the Board of Health, employees can carry only up to 40 hours at one time. The county Engineer’s Department doesn’t allow employees to convert their saved compensatory time into a cash payment.

And some employees, such as those working at Trumbull County 911, have the option of cashing in their hours. Under 911 contracts, employees can cash in up to 80 hours each year.

Hubbard’s Villano said collective bargaining has played a significant role in the development of carry-over hours and compensatory time.

"Generally, that’s the trend in the public sector. Over time, the police department gets X, then the service guys bargain and say they want the same thing. It evolves over a long history," he said.

While collective bargaining exists in the private sector, it does not hold the same weight as it does for public employees, Creatore said.

"Collective bargaining units again in the private sector are only as good as the profits of that company. The better the product, the better the profit and the more those employees can benefit from their hard work. In the public sector, it seems that raises are given automatically and they are not based on job performances. My problem with that is raises in the public sector should be based on job performances, not on collective bargaining unit automatic raises that are funded by the taxpayer," he said.

The ability to carry-over earned sick and vacation hours from year-to-year is another practice mostly unique to the public sector.

In Warren, vacation and sick hours are supposed to max out at 960, or 24 weeks, even though many city employees carry hundreds more.

For example, Warren fire Chief Ken Nussle has 2,847 hours of sick time accrued, meaning he could take off almost a year and half and still get paid.

Marc Titus, president of the International Association of Firefighters Local 204, said the union acknowledges the hazards associated with their jobs by encouraging new employees to save their sick time for when it is really needed.

"It’s like an insurance policy. Sometimes you use it, and sometimes you don’t, but it helps protect us," Titus said. "We have a minimum manning of 17, and once we go below that number, we have to go to overtime, so it actually saves the city money."

(tribune-chronicle.com)

No comments:

Related Posts with Thumbnails