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Audit raises questions about on-call pay

Wednesday, March 14, 2018 by Jo Clifton

Although Austin has a citywide procedure governing on-call and call-back pay, the Office of the City Auditor has found that the procedure is not consistently applied, and the city’s Human Resources Department has apparently not evaluated call-back pay since 2012. That’s according to an audit approved by the City Council Audit and Finance Committee last week.

“Except for the Citywide procedure,” which was last updated in 2001, the auditor’s office found “limited communication between HRD and the departments about on-call and call-back issues. HRD does not proactively communicate, provide guidance, or monitor these issues, unless requested by department staff,” the audit says.

In addition, Austin appears to stand alone among major Texas cities in paying a stipend to employees who are on call, according to the audit, although electric utilities frequently do pay employees to be on call.

Council Member Ellen Troxclair, who chairs the Audit and Finance Committee, told the Austin Monitor she thinks the city needs to consider whether it “should even have that kind of on-call policy when other cities don’t. I think it needs to be looked at,” she said.

Mayor Pro Tem Kathie Tovo said she would not be in favor of eliminating the on-call stipends, and Council Member Leslie Pool, the third member of the committee, told the Monitor via email: “I am aligned with (Tovo) on this: I am not looking to do away with call back or on-call pay at all. These pay categories serve a purpose, specifically to compensate our staff for putting their lives and time on hold when they would otherwise be off in order to ensure their availability to respond quickly to come back to work. There’s a reason on-call and call back pay exists and I support its existence. I do want it to be handled systematically and uniformly according to our stated policies, and have confidence that our HR staff will ensure that as an outcome.”

Those employees who are on call are expected to remain fit for duty, may not leave town and must be able to report to work with just a few minutes’ notice. Some of the city’s on-call employees receive $2 per hour for being on call and fit for duty, while others do not receive that stipend.

Employees who are paid to be on call for overtime work are normally paid 1.5 times the regular rate with a guaranteed minimum of two hours, according to the audit. Employees who do not receive the on-call stipend are also paid 1.5 times the regular rate, but with a guaranteed minimum of three hours’ work.

The audit states that the total amount the city paid in stipends for on-call pay in Fiscal Year 2015-16 was a little more than $1 million. In addition, the city paid more than $4.6 million that year to compensate employees who had to come back to work to do things such as repair downed power lines, stop sewage leaks, provide emergency medical and police services, fight fires, help clean up leaks of toxic chemicals after highway accidents, and close roads at low-water crossings.

According to the audit, Austin Energy paid 413 employees about $356,000 to be on call in 2016. Those employees earned a little less than $2.2 million for the call-back time worked. Austin Energy spokesperson Robert Cullick said that it is the norm in the electric utility industry to provide the on-call and call-back pay.

Cullick pointed out that the utility has “nearly 12,000 miles of wires in the air,” as well as 400 substations. “They are subject to loss of service in lightning, ice and wind. When we see an event coming, we put people on call so that we can respond quickly. It’s fair to the employees, and it’s a way that we can respond very quickly to our customers’ needs,” he said.

The other cities that auditors spoke to for this audit included San Antonio, Houston, Fort Worth and Dallas. Of those, only San Antonio has its own electric utility, CPS Energy.

According to the audit, civilian employees in those other cities do not receive on-call pay. However, auditors said they were unable to talk to people at CPS Energy, in order to inquire about the on-call and call-back pay practices.

But Austin Energy’s deputy general manager and chief operating officer, Elaina Ball, came to Austin Energy from CPS. Ball told the Monitor, “I’ve worked at multiple utilities. Most will call this standby pay, and it is expressly designed to compensate the individual” for giving up personal plans in order to be ready to go work on a substation or a power line. “It is a very common practice,” she said, and is one of the reasons for “the high reliability of our industry.”

She added, “When you look at our on-call utilization, it’s a little over $350,000 for the year, but the total labor benefits for the year add up to more than $211 million. So this equals .16 percent, less than 2 percent,” of Austin Energy’s pay to employees. Utilities use this like insurance to make sure they can deal with problems as they arise, she said.

Austin Water employees received more than $400,000 for being on call and got about $874,000 in overtime pay in 2016. Austin Water spokesperson Kevin Buchman said, “If we have a water main break or a sewer overflow, they can respond 24/7. We staff the plants 24 hours a day.” On-call employees are “responsible for responding to the call within 15 minutes and getting there within 45 minutes,” he said, noting that means they’re not allowed to turn off their phones and go the movies.

Emergency medical services employees, who are currently without a contract, received about $108,000 in on-call pay and about $785,000 for the overtime they worked in 2016, according to the audit.

In addition to Austin Energy and Austin Water, employees from the Watershed Protection Department are called out in the emergency situations, including helping to remove toxic chemicals from the highway or working at the city’s emergency operations center during a storm. However, they received only about $169,000 for overtime worked and about $81,000 in on-call pay in 2016.

Fire Department employees were paid about $49,000 to be on call but just about $22,000 for call-back worked that same year. During the time period that was being audited, Austin police officers had a contract with the city and received compensatory time off, but did not receive a stipend for being on call. That year they received about $610,000 in overtime pay.

Auditors expressed concern that departments were not getting approval for on-call stipends and had a hard time finding documentation for stipend payment requests in the departments. In addition, HRD management told auditors that the city’s payroll system has no indicator to show whether an employee is eligible to receive an on-call stipend.

“We also noted that employees receiving a stipend are being paid $2.00 per hour while in an on-call status. However, the Citywide procedure lists the stipend pay rate as $1.50 per hour. HRD management stated that the pay rate changed in 2001. The only evidence we received documenting this change was from a September 2001 pay and benefit flyer, but that change was never updated in the Citywide procedure,” the audit says.

Auditors also found that employees were using different time codes to document on-call or call-back time assignments. The practice, the auditors said, commingled on-call and call-back time with more generic time codes. As a result, call-back assignments may be inaccurate and understated, they said.

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Photo by John Flynn.

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