The MTA embarked on the effort to cut overtime costs,...

The MTA embarked on the effort to cut overtime costs, including with the LIRR, after a 2019 payroll report by the nonpartisan Empire Center for Public Policy revealed alarming overtime rates, spurring several investigations into fraud and abuse. Credit: Howard Schnapp

The MTA’s internal watchdog is raising concerns about the transit agency possibly pulling back on efforts to rein in high overtime costs, noting that recent changes in leadership and "shifts in organizational priorities" are putting wage reforms at risk.

Two years after the Metropolitan Transportation Authority adopted a 19-point plan to address out-of-control overtime, and to curb wage abuse and fraud — especially at the LIRR — the office of the MTA inspector general, in its quarterly progress report released Tuesday, pointed to the agency taking its foot off the gas.

What to know

The MTA inspector general’s office has raised concerns about the Metropolitan Transportation Authority pulling back on efforts to reduce overtime costs, blaming the reduced urgency on leadership changes and “shifts in organizational priorities.”

The inspector general said the agency is yet to enact four of the 19 actions in its overtime reform plan. The agency still has not migrated all its workers to a new time clock system, nor integrated the time clocks with its payroll. 

MTA officials say the agency is continuing efforts to rein in overtime, and has already reduced overtime costs by a quarter-billion dollars from 2018 to 2020. Union leaders say the remaining overtime is due to the high demands of ongoing infrastructure projects.

At the center of that assessment is the new "Kronos" biometric time clocks, which were purchased in 2019 to verify employees’ time and attendance and still are not in use by all workers, nor integrated into the MTA’s payroll system.

"If the MTA is to reap all the benefits of a modern timekeeping payroll system that it has already made a significant investment in of both time and money, MTA management must continue to commit to the timekeeping payroll integration," the report said. "Alternatively, if management plans to abandon the effort this far into the project, then it should be transparent about that decision with the [MTA] Board and public."

In response to the report, the MTA said it has substantially improved spending controls, leading to overtime costs dropping by nearly $750 million from 2018 to 2020.

Through the end of October, the MTA had paid $786 million in overtime — 7% more than in the first 10 months of 2020, agency documents show.

"The MTA continues to address how best to achieve full integration of the Kronos payroll system," MTA spokesperson Mike Cortez said. "Measures already implemented have resulted in annual overtime expenditures dropping by hundreds of millions of dollars, and we are committed to additional material reductions in overtime costs."

The MTA embarked on the effort to cut overtime costs after a 2019 payroll report by the Albany-based, nonpartisan Empire Center for Public Policy revealed alarming overtime rates and spurred several investigations into fraud and abuse.

Six current or former MTA employees, including five from the LIRR, since have been indicted on federal fraud charges. Earlier this month, one of them, former LIRR supervisor John Nugent, was sentenced to 5 months in jail and 5 months home confinement, after admitting to collecting more than $34,000 in bogus overtime.

Following Nugent’s sentencing, MTA acting chairman and Chief Executive Officer Janno Lieber, who assumed control of the agency in July, suggested the MTA’s overtime issues had been largely resolved, in part because of the use of the new time clock system.

"There’s some exceptions, but the overwhelming number of Long Island Rail Road employees now have to check in, have to swipe on Kronos clocks, which was not the way in the past," said Lieber, who pledged to "continue to come down" on overtime cheaters. "We think we’re making a lot of progress."

The inspector general's office credited the MTA with already implementing 15 of 19 recommendations from an overtime consultant hired in 2019, including using the new time clocks as "the standard time-keeping tool." But the agency has fallen short on making other changes, including tying the time clocks to the agency’s computerized payroll system, the report said.

Michael Sullivan, general chairman of the Brotherhood of Railroad Signalmen Local 56, which represents about 750 LIRR workers, said the time clock system "really just never worked as intended, from day one," in part because many workers report directly to, and leave directly from, job sites, rather than employee facilities.

"A policy is only good if the policy can be enforced uniformly," said Sullivan, who believes the worst behavior already has been addressed, and that the MTA’s current overtime rate reflects the work required to pull off the many major infrastructure projects underway.

"They work seven days a week. They’re away from their families. And then they have to be accused of being frauds and cheats when one or two bad guys get caught," Sullivan said.

Not only has the MTA’s progress with the time clocks slowed, it has backslid in some cases, according to the report. At three MTA agencies, including the LIRR, "employees’ compliance with clocking in before and after each work shift declined" in the third quarter of 2021.

Addressing the report, Anthony Simon, who heads the LIRR’s largest union, said "the political grandstanding and irresponsible allegations of widespread abuse" are based on old cases that predate the MTA’s reforms.

"Management recognizes that 99.9% of our workforce is working hard to do the right thing," said Simon, general chairman of the International Association of Sheet Metal, Air, Rail and Transportation Workers.

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