Overtime on the Metro-North

 New York State Comptroller Thomas DiNapoli said Metro-North Railroad workers received over $1 Million in overtime payments by abusing work rules in 2010.  Supervisors gave workers overtime for working nights and weekends, when most work occurs.  The long hours required employees to take a 10 hour rest period, which cut into most of the next work day, which employees got paid for.

Supervisors intentionally used the system to their advantage.  They would award themselves overtime, and took the same rests as their assistants, which they are not scheduled for.  The Comptroller’s Office declared this activity as fraudulent, but the railroad disputed.  The Metro-North President, Howard  Permut , argued the findings, saying that they were looking into controlling the overtime.  He also said it is hard to change the way overtime is earned, with Federal rules and a strong labor union. 

Pension payments were driven up by the overtime worked.  Employees working in their last years would use the overtime to get a higher pension.  Overtime payments from the audit were estimated to have a value of $5.5 million impact for pensions of six employees.  One employee said, “"If I had to name the top five jobs in the country, this would have to be, hands down, number one."

This finding from the State Comptroller’s Office seems to be quite significant.  I think this is clearly the supervisors using the system to their advantage.  They found a loophole in the system and weren’t afraid to use it, as it wasn’t “illegal”.  I think it is the responsibility of the internal auditors in combination with other finance members to identify this weakness in the system.  There should have been controls in place to identify the overtime paid, and a recommendation by these employees to implement a system that allocated overtime based on times most workers did not work historically.

I find it interesting that the President defended his employees in this article, rather that looking out for the tax payers and other employees not earning overtime.  It will be interesting to see if any other developments come from this audit.