The U.S. Postal Service’s spending on overtime pay to process mail spiked in fiscal 2018 following significant workforce cuts over the year, according to a new report.
The $257 million increase on overtime, a 31% jump, occurred despite the ongoing decline in mail volume and an emphasis by the mailing agency to cut personnel costs, the USPS inspector general said. The Postal Service slashed 10,000 jobs last year, 5,000 of which came from mail processing, while mail volume dropped by 5 billion pieces over the year.
Postal management had planned for a 1.3 million hour reduction in overtime, but exceeded its own estimate by 44%. Employees receive one-and-a-half times their annual rate of pay for overtime, except in certain circumstances—known as “penalty overtime”—when they receive double their normal earnings. Penalty overtime hours exceeded the Postal Service’s plan by 126%.
The IG said much of the blame can be traced to a faulty scheduling system. USPS used a week from July 2017 to determine mail processing operations, and the required employee schedules to support them, for all facilities in fiscal 2018. That week, however, was not representative of a typical week and “it did not always schedule the right people, in the right place, at the right time,” the IG said.