Audit exposes Postal Service’s overtime racket as Democrats seek bailout

Extra pay grew by billions, even as mail delivery slowed. More than 4,000 workers earned more in OT than base pay.

Updated: August 27, 2020 - 11:39pm

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The U.S. Postal Service has racked up billions of dollars in excessive overtime from its workers over the last several years, even as its employee numbers have gone up and its mail delivery has declined, according to a new audit likely to raise questions about congressional Democrats' demands for a bailout.

Overtime pay has become so predominant at America's premier mail delivery service that more than 4,000 postal workers last year actually earned more in OT pay than their base pay, a 429% increase in highly compensated overtime earners since 2014, the agency's internal watchdog reported this week.

The situation exists in part because postal employees are allowed to determine their own overtime hours without needing prior management approval, and management does not always keep accurate payroll records, the audit report concluded.

"The Postal Service needs to strengthen controls over managing overtime to successfully contain these costs," the Postal Service inspector general warned Wednesday. Between 2014 and 2019, "overtime costs and hours have trended upward and consistently exceeded their planned overtime budgets. Although package volume grew, these costs increased despite declining mail volume and increased employee levels."

The audit paints a picture of a postal service that is highly dysfunctional: Managers don't keep good records, staffing levels aren't maintained at authorized levels, and workers decide for themselves when they can charge overtime,

"Employees must be paid for all overtime work they perform, even if that time was not authorized. Unauthorized overtime occurs when an employee's clock time exceeds eight hours in a day or 40 hours in a week without prior authorization from a manager,” the report noted.

The audit revealed just how costly this OT tab has become: The annual bill for overtime charged by postal employees grew 35% from $3.7 billion in 2014 to $5 billion last year. Over the course of those five years, workers charged for an average of more than 100 million OT hours per year, the report said. Overtime, according to the IG, now accounts for between 13% and 16% of USPS' total costs.

Determining whether such overtime was warranted is made harder because "management did not have complete, accurate, and reliable payroll workhours data for FY 2019," the report noted. But based on the inspector general's analysis, as much as a half billion dollars a year in overtime was avoidable.

"We estimated the Postal Service incurred about $521.6 million in questioned costs" in 2019 alone, according to the report.

Investigators flagged the massive growth in postal workers who earned 2x and 3x through overtime pay, citing some specific examples ranging from postmen to mechanics whose inflated paychecks raised questions about whether employees could really have worked as many hours as they charged.

"A mail handler in the Northeast Area earned $141,153 in total overtime pay by working 3,329 regular overtime hours, which resulted in $205,018 in total pay" the report noted. "This was equivalent to more than three times the amount of this employee's base salary. For perspective, this amount of overtime would have required this employee to work an average of 17-hour days, consisting of eight regular workhours and about nine overtime hours every day for 365 days a year,.

Despite such remarkable findings, the Postal Service said it is not sure whether it should try to work to reduce massively rising overtime.

"Increasing complement with the intent of reducing overtime may not be the best long term solution," the service said in response to the IG report. "The appropriate use of overtime continues to give management the greatest latitude to utilize its resources at the least possible cost while controlling future salaries and benefits of new employees."

In other words, the Postal Service is signaling the OT racket will continue.

All this comes as Congress fights over a Democratic effort to have taxpayers provide as much as $25 billion in bailout money to the postal service. Such legislation passed the Democrat-led House this week, but it is unlikely to proceed in the GOP Senate.

Speaker Nancy Pelosi claims the money is needed to ensure mail-in ballots can be delivered on time in the fall. "It is all designed to suppress the vote," Pelosi said about recent efforts by Trump-appointed Postmaster General Louis DeJoy to cut costs.

DeJoy and his GOP defenders claim the Democratic bailout arguments are nothing more than "myth."

"Like the Russia hoax and impeachment sham, the Democrats have manufactured another scandal for political purposes," Rep. James Comer (R-Ky.) said last week.

Rep. Thomas Massie (R-Ky.) said he fears the Democratic bailout money is really to help augment union worker pension funds.

"They don't know what they would do with the $25 billion that was in the bill that was passed Saturday … but I suspect they would bail out the pensions," he said.

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