November 6, 2019
Honorable Eric Garcetti, Mayor
Honorable Michael Feuer, City Attorney
Honorable Members of the Los Angeles City Council
Re: On the Clock: Review of City Employee Overtime
As one of the largest municipal governments in the nation, the City of Los Angeles relies on more than 50,000 employees to serve Angelenos and protect neighborhoods from crime, natural disasters, and local emergencies. The City spends most of its budget compensating its workforce — in the form of salary or hourly pay, benefits and overtime — for the community resources they provide. My latest review takes a look at recent City employee overtime trends, including the impact on payroll costs, the level of usage in each department and high overtime tallies for individual employees. It also offers recommendations to help the City use data to better control spending and enhance employee safety. The review covers sworn and civilian City employees in all departments except the Department of Water and Power, which uses a separate payroll system.
The City of Los Angeles, excluding Los Angeles Department of Water and Power (LADWP), had more than 53,600 employees during fiscal year 2018-2019. Total payroll was $4.3 billion of which 10.9% or $470 million was overtime earned and paid. Overtime is a valuable tool and must be properly managed and monitored. A total of 8.59 million hours of overtime was recorded in FY ‘18-19 were, of which 83% was earned and paid, 6% was earned as compensated time, and 11% was primarily for lump sum payouts at retirement or year end.
Introduction to the City’s Payroll Practices
The City’s civil service system is established by Article X of the City Charter, and is overseen by a five-member Board of Civil Service Commissioners. The Commission established classifications for all positions of employment, which constitute the classified civil service of the City. The City also has a limited number of non-civil service employees that are considered “at will”; as of June 2019, there were 2,189 employees exempt from civil service.
Overview of Citywide Overtime Earned and Paid
City departments, excluding LADWP, paid employees $2.05 billion in overtime over the past five fiscal years, beginning July 1, 2014 and ending June 30, 2019. As presented in Exhibit 2, overtime payments have increased $110.6 million from FY ‘14-15 to FY ‘18-19.
Analysis of the Top 5 Departments by Overtime Earned and Paid
As shown below in Exhibit 13, the five highest overtime departments for FY ‘18-19 were LAFD, LAPD, LAWA, Sanitation, and Transportation. These five departments accounted for 90% of overtime dollars spent citywide in FY 2019.
- Department General Managers should make better use of existing open data and analytical tools such as dashboards, etc., to monitor and benchmark overtime usage by office, section, and/or unit within the Department; evaluate strategies such as analyzing the cost/benefit of hiring additional employees and/or exploring other employment models to reduce the need for employees to work overtime and thereby reduce fatigue and safety concerns. (Responsible Entity: Department General Managers)
- Department General Managers should monitor high overtime use by individual employees to ensure overtime payments are accurate and authorized, as well as to take into consideration the potential impact of employee fatigue and safety when working extended hours. (Responsible Entity: Department General Managers)
- City Policymakers should explore overtime control strategies that have been implemented in other cities, such as cross-training employees and limiting employees from working more than a certain number of overtime hours per shift/annually, and evaluate how those approaches can be successfully adapted within the context of existing and future labor agreements. (Responsible Entity: City Policymakers)