• on Jun 10th, 2013 in Labor | 9 comments

    The national agreements between the U.S. Postal Service and two of its unions give the Postal Service greater flexibility to use non-career employees for clerk and mail handler duties. The Postal Service pressed for the new employee categories in its separate labor negotiations with the American Postal Workers Union (APWU) and the National Mail Handlers Union, because it wanted greater workforce flexibility in scheduling and aligning employees with the work available. The Postal Service expects this will allow it to reduce labor costs, which currently make up about 80 percent of total costs.

    With the APWU, the Postal Service has already begun to utilize the two new employee categories created under their National Agreement, which include postal support employees and non-traditional full-time employees. The provision on new employee categories in the National Mail Handlers Union’s agreement does not take effect until August, but it will allow for similar type of workers to be used. These workers will start at a lower hourly wage and will have limited benefits.

    The number of Postal Service career employees has declined steadily over the past decade. As of early 2013 the Postal Service had just over 500,000 career employees, down from 729,000 in Fiscal Year 2003. Recent buyout offers have spurred a wave of retirements and moved the Postal Service closer to its goal of further reducing its workforce by 150,000 employees by 2015. Unlike previous reduction-in-workforce efforts, the Postal Service now has the flexibility to hire part-time employees. By shifting more work to lower-paid employees with less expensive benefits, the Postal Service is hoping to move the needle on its labor costs.

    A recent OIG audit report on the use of part-time employees in processing operations found that the Postal Service is increasing its use of these part-time positions, but it has not hired them to the fullest extent allowed by the contract. It could have saved more than $30 million in labor costs last year if it had hired postal support employees up to contract limits.

    Time will tell if the new workforce flexibility significantly reduces labor costs. But our early audit work suggests savings are available. What is your experience with the changes in the types of employees and how they are used? Is mail processed as efficiently, more efficiently, or less efficiently using postal support employees and non-traditional full-time employees? Have there been any unexpected effects (positive or negative) of the changes? Has overtime usage increased or decreased as a result of using part-time and non-traditional full-time employees?

  • on Jan 7th, 2013 in Labor | 5 comments
    U.S. Postal Service employees are covered by the Federal Employees’ Compensation Act (FECA), which provides workers’ compensation benefits to civilian federal employees who sustain work-related injuries or an occupational disease. The U.S. Department of Labor Office of Workers Compensation Programs (OWCP) administers workers’ compensation and provides direct compensation to providers, claimants, and beneficiaries. The Postal Service later reimburses OWCP in what is known as “charge-back billings.” The Postal Service is the largest FECA participant in the federal government. It paid $1.2 billion in workers’ compensation claims and $67 million in administrative fees in charge-back year 2011. In addition, its estimated total liability for future workers’ compensation costs is about $17.5 billion. The Postmaster General noted in testimony last year that when the Postal Service revalues its liability to reflect current interest rates, it creates significant non-cash fluctuations in its bottom line. For this reason and others, the Postal Service has pushed for comprehensive FECA reform legislation. Providing gainful employment within medically defined work restrictions is in the best interest of both employees and the Postal Service. The Postal Service uses its limited duty program to assign available work for those employees who are temporarily unable to perform their regular functions. Limited duty employees retain the discipline of going to work every day and recuperation may also be accelerated if they are as active as possible. Early return to the regular job is the ultimate objective of the limited duty program. However, with diminishing mail volumes and limited resources for proactive case management, the Postal Service faces significant challenges in providing adequate work. The Health and Resource Management (HRM) staff and other officials play an important role in administering the injury compensation program and reducing related costs by returning injured employees to work as soon as possible and, in part, pursuing third-party liability. The Office of Inspector General (OIG) intends to assess whether the Postal Service’s HRM staff, supervisors, and other officials have all the necessary resources to successfully return employees back to work. And if not, what tools do they need to facilitate the return to work process. What practices are working or should be changed to more effectively administer the Postal Service’s injury compensation program? Share your comments in our blog section and follow the link to take one of the three surveys on this topic, depending on your employment position.
  • on Jun 6th, 2011 in Labor | 24 comments
    It happens many times . . . a company invests time and money into training employees only to have them leave soon after the training is complete. Some industries and companies now have contractual agreements requiring employees to repay training costs to their employers if they separate from employment before a specified period. Congress has also passed legislation requiring continued service agreements from government employees who have received extensive training. These contracts obligate employees to continue working for the agency (or another government agency, depending on their employer’s policy) for a period at least equal to three times the length of the training. If the employee leaves government service before the agreed-upon service time, the agency has the right to require repayment for the amount of time not served. Private sector industries such as information technology, airline, and trucking are also requiring employees to sign these types of agreements. One company requires employees to sign contracts for training programs that are considered expensive and time intensive. The company uses a formula that equates one month of labor for every $1,000 of costs; for example, a $7,000 course would require a seven month commitment.

    The U.S. Postal Service employs approximately 40,000 maintenance craft employees to work in a variety of assignments. Some of these assignments, such as maintenance mechanics, require specific training at great cost to the Postal Service. For example, one training course lasts 13 days and costs $3,325 per employee.

    Should employees receiving specialized training sign contracts to remain with the Postal Service for a specified period so that the cost of providing the training can be recouped? Should employees who received training be permitted to leave for more lucrative positions in the private sector as soon as they are certified without compensating the Postal Service? Should such restrictions apply to all Postal Service employees who receive specialized training?

    This blog is hosted by the Office of Audit's Network Processing team.

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