By David Pendered
MARTA’s latest contract negotiation with its labor union could help MARTA curb personnel costs by reducing absenteeism and the overtime costs it creates.
Absent workers represent one of the main categories where MARTA could cut costs, according to the management audit conducted in 2012 by the consulting firm KPMG. MARTA covers for absent workers by approving overtime pay for their replacements.
KPMG recommended MARTA implement programs to ensure employees show up for work. MARTA followed the recommendation in the first contract negotiation to arise after the audit was delivered.
At the time of the study, MARTA was spending 3.3 percent of its total personnel budget to cover for absentee workers, according to figures in the audit. Total personnel costs were $344.8 million, and represented 77 percent of MARTA’s total operating costs. Costs related to absenteeism amounted to $10.9 million.
KPMG’s report stated the situation in these terms:
- “MARTA employees incurred approximately 692,000 absentee hours in 2011 not resulting from holiday, PTO [paid time off], vacation, and sick leave. Absentee hours create a staffing need addressed through overtime hours or additional staffing. The 692,000 absentee hours represents the equivalent of 371 employees. Fringe benefit costs of 371 employees are approximately $10.9 million.”
KPMG recommended four actions. They include better use of technology to track attendance, and cultural changes that promote awareness of employee performance. In addition, KPMG recommended:
- “Negotiate labor policies for attendance that define disciplinary actions which more effectively discourage absenteeism.”
The new union contract provides specific measures to reform the absentee program. MARTA’s board of directors approved the contract Dec. 4. The contract is to take effect Jan. 1, 2015 and extend through Dec. 31, 2017.
The board also provided a one-time, lump sum, 1 percent pay incentive for all MARTA employees, whose salaries have been frozen since the recession. Union workers will receive an additional 3 percent wage increase Jan. 1, 2015, and additional wage increases of 3 percent on July 1, 2015, July 1, 2016, and July 1, 2017.
In a statement released after the vote, MARTA GM/CEO Keith Parker said:
- “The labor contract ratified today by the MARTA Board of Directors provides meaningful wage increases for our employees, establishes the kind of work rule reforms to make us as efficient as possible while moving the agency forward in terms of keeping and attracting great employees. I want to thank the staff who never stopped working to move this process toward a successful conclusion.”
The contract contains three reforms that address the related issues of arriving late to work and being absent:
Tardy
- Tardy is defined as showing up after the report time. Being tardy eight times a year is grounds for termination. MARTA will grant four tardy arrivals with no penalty. The fifth tardy warrants an oral warning. The sixth tardy warrants a written warning, and the seventh warrants a final written warning.
Absent without leave
- An employee who’s AWOL three consecutive days will be determined to have abandoned the job and be terminated. Exceptions will be granted if the employee can document a medical or similar emergency.
Chronic absenteeism
- An employee absent over 18 percent of scheduled work time will have the absences reviewed by a joint MARTA/union committee. The percentage represents 47 work days for a fulltime employees. Appropriate disciplinary actions will be taken, up to and including termination.
The KMPG audit reported a mixed bag of personnel costs, which at the time were budgeted at $344.8 million and represented 77 percent of the total operating budget. The high proportion of spending on personnel is common, and is the reason cost-cutting efforts often focus on the number of employees, their wages and benefits.
For example, KPMG found that MARTA’s wages and salaries are 3.5 percent lower than transit peers, in terms of the percentage of total personnel costs.
However, KPMG found that MARTA’s fringe benefits are 3.5 percent higher than transit peers.
The MARTA union employees will find ways around these new rules, just as they do the existing rules. For example, you could be AWOL two days, then work one day, then be AWOL two days, and repeat until you accumulate 46 AWOL days. You would then have worked 22 days and been paid for 68 days. 46 AWOL days amounts to over 17% of the work year for a fulltime employee. The way to fix this is to not pay AWOL employees, which is standard practice in private industry.
MARTA pays more overtime than paid time off, and they seem to pay a lot of paid time off. Based on the pie chart, paid time off is about 34 work days per year.This again exceeds the average 29 days in private industry.
Add 34 days paid time off to 46 AWOL days and you could miss 80 days a year, or 32% of the work year for a fulltime employee.
In summary, this contract may be a start but only a start. MARTA has a long way to go.
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