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Study: Work furloughs cost more than planned

August 3, 2010 12:00:00 AM PDT
State workers rallied in Sacramento Tuesday amid a new round of furloughs. Furloughs may not be saving the state as much as initially thought.An alarming new report shows worker furloughs don't save as much money for the state as originally thought. Instead, the state ends up paying overtime to state managers who are forced to cover the shifts.

Dozens of people staged a protest in Sacramento Tuesday.

Critics of the state furlough say a new report is more ammunition for why unpaid leave is a bad idea.

State workers have a lot to protest these days. Most want a union contract in place to avoid another wave of three unpaid furloughs days a month, set to begin next Friday.

"I'm staying with a friend because I can't afford another house right now. It's been tough for me," said Linda Robinson, a state worker.

Some are even angrier about a new report by independent investigative reporting group California Watch that finds hundreds of state managers and other high-level workers are actually making more money on some furlough weeks, thanks to a federal law.

The Fair Labor Standards Act mandates that salaried workers be paid hourly when reduced hours like furloughs are in place. So now they've become eligible for overtime, being paid $1.6 million on OT altogether.

"That's ridiculous," said John Krumm, a state worker. "When you're cutting the lower workers and you're giving the managers more money during a furlough time, it seems like you're counter-balancing everything that's going on."

When California Watch crunched the numbers, three departments came out on top with hundreds of thousands of dollars in overtime over 14 months, beginning in February 2009:

  • The Employment Development Department spent nearly $500,000.
  • The Office of the State Chief Information Officer was the next biggest spender with $328,000
  • And CalPERS, the state retirement system, racked up a $187,000 tab.

Even though Governor Schwarzenegger ordered overtime to be minimized, the state says it can't be helped in many departments.

"The amount of money that was spent on overtime is a very tiny portion of the overall $2.8 billion savings," said Lynelle Jolley, Calif. Dept. of Personnel Administration.

At the Employment Development Dept., the manpower and supervision required to churn out a record $20 billion in unemployment checks last year was unavoidable.

"It was really an overall, high demand, all-hands-on-deck during this recession to make sure that we're meeting the needs of our clients," said Loree Levy, spokesperson for the Employment Development Dept.

Overtime for managers will continue because the furloughs will be in effect at least as long as there is no state budget, which is now more than a month late.

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