Overtime pay may be putting a dent in state’s furlough savings


Like many other state employees, prison nurse Nellie Larot was hit last year with furloughs that cut her salary: It dropped $10,000, to $92,000.

But she more than made up for it by working extra shifts, raking in $177,512 in overtime, according to state records. Her total $270,000 in earnings last year eclipsed the $225,000 paid to Matthew Cate, head of the entire state prison system.

Despite Gov. Arnold Schwarzenegger’s decision to furlough workers three days a month to save money, many employees are taking home paychecks fattened by overtime -- more than $1 billion of it last year.

The total overtime paid in 2009 actually dropped slightly, by $64 million from the year before. But it was up from the $808 million paid in 2005 and $598 million in 2004.

“People want more money,” said Larot. The furloughs, which began in February 2009, cut her monthly pay by many hundreds of dollars. Without overtime, she said, “it would be a hardship.”

Records show that the top 50 recipients of overtime last year each received more than $100,000 in extra compensation. Most were from the departments of corrections and mental health, which account for more than half of the overtime doled out by state agencies; 35 of the top 50 were registered nurses.

Other top earners include prison guard Lt. Randall Rowland, who collected $133,000 in overtime pay, and California Highway Patrol Officer Kerry Comphel, who received $127,000.

The rising overtime “is unfathomable,” said Jon Coupal, president of the anti-tax Howard Jarvis Taxpayers Assn. “It just shows the extraordinary disconnect between the public sector and the real world. No business would operate this way.”

State Auditor Elaine Howle has also raised red flags. A review by her office found that more than 100 nurses and psychiatric workers on the state payroll had at least doubled their salaries with overtime, working as many as 90 hours a week.

Two nurses at Napa State Hospital were paid more than $1.3 million combined in overtime during a five-year period ending in mid-2008, Howle found. Beyond the cost to taxpayers, Howle worried that large amounts of overtime could impair nurses’ performance and jeopardize patients.

“It needs to be better managed so you don’t have employees working significant amounts of overtime and potentially raising health and safety issues,” Howle said in an interview.

The auditor had warned in October that furloughs and layoffs would probably increase overtime costs in some agencies, and she called for the state to renegotiate its union contracts to set caps.

Nancy Lyerla, a leader of the largest union representing state nurses, noted that some medical and mental health facilities have to be staffed 24 hours a day, seven days a week. She said the union had warned state officials that furloughs would create staffing gaps that would have to be filled by employees working overtime at time-and-a-half pay.

“They didn’t look at what it costs to replace the people on furlough,” Lyerla said.

The effect of the furloughs is to cut most workers’ regular pay by about 14%, and the state expects to save $1.2 billion this way in the current fiscal year. But on an individual basis, furloughs have not always saved money.

The unpaid time off saves the state $13,650 annually in pay to Larot, but her overtime last year went up nearly twice that amount -- by $25,000 -- from the year before.

Schwarzenegger, who ordered the furloughs to reduce a multibillion-dollar budget shortfall, has taken steps to reduce overtime, his representatives said. The governor signed legislation last year stopping employees from receiving overtime pay in weeks when they also take leave time. He also directed department heads to manage the furloughs so that they do not result in overtime.

Still, “there are some facilities that require 24/7 coverage,” said Aaron McLear, a spokesman for the governor.

That is the case where Larot works, in the Department of Corrections and Rehabilitation’s Deuel Vocational Institution in Tracy. She “legitimately earned” her overtime, with much of it spent overseeing newly admitted inmates on suicide watch, according to Luis Patino Jr., a spokesman for the California Prison Health Care Receivership.

Patino described Larot as “an exemplary employee who takes time off when necessary to maintain her safety and well-being and that of the inmates under her watch.”

Howle’s audit found that other sites, including wards at Napa State Hospital, frequently overstaffed their shifts. Mental health officials said some units did not accurately report patient and staffing needs to the central office that gives work assignments, and Howle said a consultant should be hired to evaluate whether common staffing levels are justified.

“Overtime has been gamed in California for decades,” said Coupal. “Clearly there is a lack of oversight. This needs to be clamped down.”

Larot dismissed criticism that employees are taking advantage of a broken system.

“I don’t know why people are complaining about the overtime. We work the overtime,” she said. “I don’t think it’s anybody’s business.”

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