OVERTIME AND COMPENSATORY TIME

More documents

Recommendations

Info

4. Cost of Hiring New Employees OBSERVATION There has been a common belief that because of the high cost of benefits, it is less costly for the current employees to work the necessary overtime rather than hire new employees. An analysis was performed on a few select positions taking into consideration the costs for current employees for 2008 and the overtime worked and then comparing that to hiring a new employee to work this overtime. The average cost of employee benefits for health insurance, life insurance and retirement costs for each employee is $13,120 and $16,116 for 2008 and 2009 respectively. Social Security and Medicare costs of 7.65% of wages paid and worker’s compensation insurance costs (range from .31% to 4.85% for 2008 and .5% to 6.9% for 2009 on total wages paid) must be added to the above employee benefits’ cost to arrive at the total cost of hiring employees. The Social Security and Medicare costs along with the worker’s compensation insurance costs are calculated on all wages paid and continue as an expense on overtime wages paid. Analysis revealed that there is a potential for cost savings by hiring new employees in situations where there is a high enough volume of overtime in total for the department within job positions in department such as the Prison, the Sheriff’s Department and possibly Gracedale. This actual savings is dependent on many factors among which are the status of department vacancies, ability to fill vacancies, current staffing requirements, necessity and ability to fill daily voids due to staff leave time taken, the actual overtime that will be required, and the current level of staff seniority. Specific employees from the Prison and Gracedale who were among the top wage earners for 2008 and their actual overtime hours were analyzed. In the case of the Prison employee, enough overtime hours were worked to justify hiring another employee at a potential cost savings of up to $26,600. See Attachment 1, page 20. In the case of the Gracedale employee, overtime worked did not justify hiring another employee. However, if there were 2 current employees in the same position at Gracedale with similar overtime hours to the individual in our analysis, it would have presented a situation in which hiring an employee to work the overtime of those 2 employees could have saved the County up to $43,933. See Attachment 2, page 21. RECOMMENDATION It would benefit the County to take a look at the departments with the highest volume of overtime hours to determine the exact savings that could occur with a redistribution of staffing and hiring new employees. MANAGEMENT RESPONSE John Stoffa, County Executive 9
A committee will be put together to look at overtime and trends within the County. We will look to use the group to come up with ways to lower overtime. The committee will be put together with representatives from the affected groups and organized by Vic Mazziotti. Connie Sutton-Falk, Director, Human Resources While Human Resources plays no role in determination of the amount of overtime or staffing levels in each department because this is a budgetary matter, I concur that you reach a breakeven point of whether to pay overtime or hire more staff. I also suggest that the County look into hiring more part time relief workers. Marvin Granda, Gracedale Administrator Gracedale agrees that certain initiatives could be instituted that could potentially save on overtime and nursing pool costs. 10
Page 1 and 2: Audit Report County Controller Step
Page 3 and 4: Table of Contents PAGE EXECUTIVE SU
Page 5 and 6: INTRODUCTION The country is current
Page 7 and 8: AUDIT RESULTS Section A - Reporting
Page 9 and 10: 2. Overtime Statistics by Departmen
Page 11: 3. Compensatory Time OBSERVATION Pe
Page 15 and 16: 2. Payroll Errors OBSERVATION Two p
Page 17 and 18: Section C - Compliance 1. Release T
Page 19 and 20: 2. Monitoring Compensatory Time OBS
Page 21 and 22: Policies that Boost Overtime Costs
Page 23 and 24: Prison Employee - 2008 Attachment 1

OVERTIME AND COMPENSATORY TIME

Create successful ePaper yourself

Delete template?

Save as template?