How to Fix Skyrocketing Overtime

In San Jose, California, overtime costs in the police department increased 300% over the last decade, from $10.7 million in fiscal 2011 to $47 million in fiscal 2020, according to a March 2021 audit. Part of that multiyear increase was related to staff reductions that occurred following the Great Recession, but the audit also found that the city needed to exert more control over discretionary overtime – situations in which employees earned time-and-a-half pay for work that might normally have been accomplished in regular work hours. 

As San Jose’s auditor Joe Rois points out, overtime isn’t just a spending problem. It also has implications for fatigue and diminished levels of performance for workers who are putting in excessive numbers of hours, particularly in jobs that are already stressful, like police work. “There’s been a lot of research about the potential risks of irritability and impaired judgment,” he says. 

Attention to this issue has skyrocketed over the last few years, particularly in performance auditors’ offices. A careful reading of about three dozen audits and other reports from governments all around the U.S., published since 2017, reveal understaffing issues that give rise to increased use of overtime, inability to keep overtime costs in line with budget estimates, and the lack of enforcement of monitoring, approval and documentation policies that were designed to keep overtime under control.

Though much of the attention to overtime has been in the public safety arena, it’s an issue through many parts of government. In New York State, a May 2021 comptroller’s report examined the state’s 78% increase in employee overtime earnings from 2011 to 2020, resulting in an all-time high in 2020 of $850 million. Three large agencies, the Office for People with Developmental Disabilities, the Department of Corrections and Community Supervision and the Office of Mental Health accounted for most of the overtime hours there.

Of course, overtime itself isn’t a bad thing. In fact, it can be a necessity. Consider the need for overtime hours during snowstorms, when sanitation departments are working around the clock to keep the streets clear. It would be impossible to deal with such unexpected events without asking 40-hour-a-week employees to put in additional time.

The pandemic had dual effects on overtime use. In some agencies, like those that oversee special events that were canceled, overtime usage diminished. But elsewhere in state and local governments it led to increases in the need for overtime to deal with burgeoning health care needs or the surge in demand for unemployment benefits, which dramatically increased staffing needs in the offices that provide them.

When out-of-control overtime is identified, it can not only result in negative press coverage, but create heightened concerns among public leaders. For instance, in Arlington County, Virginia, elected officials who served on the advisory audit committee several years ago were struck by the number of firefighters whose overtime earnings lifted them onto a list of the 15 highest-paid employees in the county. “That struck them as problematic and worthy of further inquiry,” says Chris Horton, county auditor. 

In the last several years, Horton’s office has taken on overtime as a major area of inquiry and has made recommendations for improvements in overtime practices in the county police and fire departments and the emergency call center. Horton notes that overtime is a particularly useful topic for attention by auditors, because there are ways to exert better controls over its use. “It’s an area that requires significant controls and a lot of opportunity for improvements are there,” he says.

In “The Great Overtime Dilemma,” an independent report we researched and wrote a year ago for a private company, we pointed out a number of ways in which overtime can be controlled – through better understanding of staff and scheduling needs, stepped up approval processes and improved documentation.

A particularly important element that surfaced in our research last year and in our reporting for this column was the development of solid data to track where overtime is being used, how it is being used and who is using it. 

“You need to track this so you know what’s happening,” says Rois, who points out that San Jose police now have a budget allocation for a data analyst, who can look more deeply into when, where and why overtime is occurring.

Technological systems help to avoid the many errors that can occur when overtime is tracked manually. But knowing how to use the systems and how to apply codes to different kinds of overtime use in a consistent and useful way is an important part of the solution. It’s also critical to make sure there is an alignment between the organization’s objectives and the data that’s being collected. 

Better Data Provides Better Results

Using data effectively doesn’t just involve purchasing the technological systems to track what’s happening but developing the internal knowledge necessary to get the most out of these systems through deep data dives. “Better data lets you see where you are spending your money and time and that plays into budget requests and allocations,” says Deputy Chief Adrienne Quigley, who oversees the Arlington County Police Department systems management division. 

One improvement in that county has been the use of a quarterly report that specifically examines overtime use for employees who earn more than 25% of their salaries from overtime. “We go back and look at the type of overtime that they worked and how they’re spending their time and make sure it’s an efficient use of resources,” says Quigley. 

The quarterly look at high overtime users also helps the police department know if officers are violating rules that require at least a seven-hour break in a 24-hour period and another that prevents officers from working more than 10 days in a row – both rules allow for flexibility in emergencies but help to avoid officer fatigue otherwise. The police department has also instituted routine internal audits to surface overtime issues and deal with them as they occur.

Horton points out that departmental willingness to create and enforce overtime limits and controls is a key factor. “Tone at the top is so important,” he says. “It’s critical that the police chief and the fire chief and the sheriff and the director of the 911 call center say this is a priority.”