Customs Service: Effects of Proposed Legislation on Officers' Pay
Published: 2001-01-31T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: GAO reviewed the effects of proposed legislation--H.R.
section_title: What GAO Found
paragraphs: 1833--on the pay of officers at the U.S. Customs Service. The proposal would amend the 1911 Act governing Customs officers' overtime and premium pay, and it would more closely align Customs differential pay with that of other federal agencies. Should the provision be enacted, Customs officers would be limited to the amount and times for which they would be eligible for night differential pay. In addition, another section of the proposed law would remove premium pay from the calculation of the $30,000 fiscal year overtime and premium pay cap that Customs officers may not exceed. GAO's analysis of Customs data showed that had the provisions of H.R. 1833 been in effect during fiscal year 1999, many officers would have experienced significant pay decreases. Managers and supervisors asked to analyze the proposal had mixed reviews, but those not in favor of the proposal were concerned that less eligibility for night differential pay would lead to low morale and staffing problems.

section_title: Letter
paragraphs: This report responds to your request that we review the effects of proposed legislation on U.S. Customs Service officers’ pay. As agreed with your staff, we primarily focused on the provisions in H.R. 1833,introduced in the 106th Congress, that would affect Customs officers’ night differential pay. In May 1999, the House of Representatives passed H.R. 1833, which contained these pay amendments. In August 1999, the Senate passed another version of H.R. 1833, which did not contain the pay provisions. Similar provisions were introduced, but not passed, in the 105th Congress, and such provisions may be reintroduced in the 107th Congress. The pay provisions in H.R. 1833 would amend the 1911 Act, as amended, governing Customs officers’ overtime and premium pay, and they are intended to more closely align night differential pay for Customs officers with that of other federal agencies. A primary issue of concern is the extent to which the pay provisions in H.R. 1833 would reduce Customs officers’ night differential pay.
Our objectives were to (1) compare current law to proposed legislative changes in H.R. 1833 dealing with Customs officers’ pay, (2) determine the extent to which Customs officers’ pay would increase or decrease if proposed changes were enacted, and (3) obtain Customs and the National Treasury Employees Union’s (NTEU) views on the proposed changes. Our review focused primarily on analyzing the effects of sections 123 (a) and (b) of subtitle C of H.R. 1833 dealing with night differential pay. In addition to our analysis, we also obtained views on sections 123 (a) and (b) and section 121, which addresses Customs officers’ annual overtime and premium pay cap.
To address our first objective, we compared current law and related federal regulations along with a pertinent arbitration ruling to the proposed changes in H.R. 1833 to identify differences and determine how the changes would potentially affect Customs officers’ night differential pay. To address our second objective, we analyzed the Customs Overtime and Scheduling System (COSS) database—which contains detailed information on officers’ overtime and premium pay (Sunday, holiday, and night differential)—to capture officers’ night differential pay earnings for fiscal year 1999. We analyzed data nationwide and then more specifically on five judgmentally selected Customs ports of entry. We then determined what the officers’ night differential earnings would have been if sections 123 (a) and (b) of H.R. 1833 had been in effect during fiscal year 1999.
Although the patterns of hours worked in future years may change, and our five selected ports are not representative of all ports, our analysis is an indicator of the changes that could occur in pay if provisions such as 123 (a) and (b) were enacted. To address our third objective, we obtained documentation from the Commissioner of Customs and written comments from the NTEU national president. We also interviewed Customs managers, supervisors, and officers, and NTEU chapter presidents at the five selected ports. More specific information on our objectives, scope, and methodology is discussed in appendix I.
subsections: section_title: Background
paragraphs: The U.S. Customs Service has a diverse mission spanning a large geographic area. Customs responsibilities include (1) collecting revenue from imports and enforcing Customs and other U.S. laws and regulations, (2) preventing the smuggling of drugs into the country, and (3) overseeing export compliance and money-laundering issues. At the close of fiscal year 1999, Customs had a full-time permanent workforce of about 19,000 employees–including about 8,000 Customs officers (inspectors and canine enforcement officers). These employees carry out Customs mission at its headquarters, 20 Customs Management Centers, 20 Special Agent-in- Charge offices, 301 U.S. ports of entry, 5 Strategic Trade Centers, and over 25 international offices. Customs officers processed over 21 million import entries, with a value of $977 billion; 137 million conveyances; and 480 million land, sea, and air passengers in fiscal year 1999.
subsections: section_title: Premium Pay Process
paragraphs: Although our review focused on night differential pay, which is part of premium pay, we are also providing some background information on all premium pay components (Sunday, holiday, and night pay) and data on overtime pay because these items are often reviewed collectively for oversight purposes. In addition to base and overtime pay, Customs officers can earn additional compensation through a premium pay (Sunday, holiday, and night differential pay) system. This system is governed by pay amendments in the Customs Officers Pay Reform Amendments (COPRA), which was part of the Omnibus Budget Reconciliation Act of 1993 (P.L. 103-66; 107 Stat. 312, 668).
Customs officers earn pay (base pay plus premium pay) for regularly scheduled work on Sundays, holidays, and nights as follows:   Sunday pay is 1.5 times the basic hourly rate (50-percent premium);   holiday pay is 2 times the basic hourly rate (100-percent premium); and   night pay is 1.15 or 1.20 times the basic hourly rate (15- or 20-percent differential); that is   1.15 if the majority of hours worked were between 3 p.m. and midnight   1.20 if the majority of hours worked were between 11 p.m. and 8 a.m.
As shown in table 1, according to Customs, its overtime and premium pay expenditures for fiscal years 1995 through 1999 ranged from a total of $106.3 million to $143.1 million, with night differential pay ranging from $8.9 million to $13.6 million. By law, combined overtime and premium pay currently cannot exceed a fiscal year cap of $30,000 for each Customs officer.
Figure 1, below, illustrates fiscal year 1999 expenditures for overtime and premium pay, including those for night differential pay.
In addition, as shown in table 2, from fiscal years 1995 through 1999, total hours of overtime and night differential worked by Customs officers ranged from approximately 2.5 million to 3.1 million overtime hours and from approximately 3.3 million to 4.5 million night differential hours.
section_title: Comparison of Current Law to Proposed Night Differential Pay Changes
paragraphs: Section 123 (a) and (b) of H.R. 1833 proposed changing the way that night differential pay is earned and calculated. Section 123 (a) would override a 1995 arbitration ruling that interpreted law and would provide Customs with the authority to prohibit Customs officers from receiving night differential pay when they take annual, sick, or other leave from regularly scheduled night work. Section 123 (b) would change the times and reduce the number of hours in a day that Customs officers could earn night differential pay. This section, as discussed in more detail in table 3 below, would replace the current “majority of hours” provision, which allows night differential pay for shifts starting as early as 12 noon and as late as 3 a.m. Instead, section 123 (b) would limit night differential pay to hours worked between 6 p.m. and 6 a.m. and on a 12 midnight-to-8 a.m. shift.
Section 121 would change the way the annual overtime and premium pay (Sunday, holiday, and night differential pay) cap is calculated. It would remove premium pay, including night differential pay, from the annual pay cap that Customs officers cannot exceed. Table 3 describes and compares current law with proposed changes to night differential pay and the annual pay cap. As noted in table 3, section 123 (b) would eliminate the “majority of hours” provision for night differential pay. Instead, night differential pay would be limited to actual hours worked between 6 p.m. and 6 a.m. and for actual hours worked on a 12 midnight-to-8 a.m. shift.
Figure 2 illustrates the information discussed in table 3 on the hours officers can earn night differential pay and the percent of night differential earned under current law and proposed legislation.
As shown in table 4, elimination of the “majority of hours” provision would decrease the number of available hours that Customs officers could earn night differential pay. However, to a lesser extent, it would also increase the number of night differential hours available for a few morning shifts. Generally, eliminating the “majority of hours” provision would have the effect of reducing Customs officers’ pay.
An example of how the elimination of the majority of hours provision would decrease the number of available night differential hours is as follows: If a Customs officer is scheduled to work a shift that starts at 12 noon and ends at 8 p.m., 5 of the 8 hours of that shift (the majority of hours) occur between 3 p.m. and 12 midnight. As such, because the majority of hours worked falls within the prescribed hours (3 p.m. to 12 midnight) under current law, the Customs officer would earn night differential pay at 15 percent of the base hourly rate for the entire 8-hour shift. Under proposed pay changes in H.R. 1833, the officer working the 12 noon-to-8 p.m. shift would earn night differential pay at 15 percent of the base hourly rate only for the 2 hours worked between 6 p.m. and 8 p.m. In short, the Customs officer would have 6 fewer hours subject to night differential pay under the proposed changes. “Finally, the Committee recognizes the adverse impact on the quality of life of Customs officials  who are required to work regularly scheduled shifts at night or on Sundays and holidays. Accordingly, the bill provides for shift differential compensation at levels substantially greater than applied generally to other Federal employees for such regularly scheduled work.” (H.R. Rep. No. 103-111, at 1233 (1993))
section_title: Most Customs Officers Would Receive Less Night Differential Pay Under Proposed Changes
paragraphs: Our analysis of the COSS database nationwide showed that had sections 123 (a) and (b) of H.R. 1833 been in effect on the six most frequently used night shifts during fiscal year 1999, Customs officers would have received about $6 million in night differential pay—about $5 million less than what they actually received that year. These six shifts accounted for 82 percent of the night differential pay in fiscal year 1999 (see table 10 in app. I). Similarly, our analysis of the COSS database for the five selected ports showed that 1,331 officers (97 percent) would have received less night differential pay had sections 123 (a) and (b) been in effect. These sections would prevent Customs from paying officers night differential pay when on leave and would reduce the number of available hours in a day that Customs officers could earn night differential pay. In particular, our analysis showed that section 123 (b) would cause the greater amount of pay decreases and that the amounts of potential pay decreases and number of Customs officers affected varied by port. For example, officers working shifts starting in the early afternoon, such as those at JFK, would have been most affected by pay decreases if the proposed changes were implemented primarily because the hours worked before 6 p.m. would no longer qualify for night differential pay.
subsections: section_title: Extent of Night Differential Pay Reductions Varied by Port
paragraphs: Our analysis of Customs night differential pay nationally showed that of the 332 ports (including subports, such as courier facilities) accumulating COSS data during fiscal year 1999, 106 had no night differential pay, 59 paid out less than $1,000, and 112 paid out over $10,000. Ten of the ports had night differential payments of $400,000 or more. JFK topped the list with night differential pay of about $1.8 million in fiscal year 1999. The top 100 ports and the amount of night differential pay officers at these ports received in fiscal year 1999 are shown in table 9 of appendix I.
During fiscal year 1999, 2,011 Customs officers worked at the five ports we analyzed. Of these officers, 1,377 (68 percent) received night differential pay sometime during the year. As shown in the table below, 1,331 (97 percent) of these officers receiving night differential pay at these five ports would have received less pay had the proposed changes been in effect during fiscal year 1999. By contrast, to a much lesser extent, 122 officers at four of the five ports would have received increased night differential pay had the provisions been in effect.
The amounts of reduced night differential pay that the 1,331 Customs officers would have received had the proposed changes been in effect varied by port, as shown in table 6. The potentially decreased pay was affected by how frequently officers worked night differential shifts, how many hours of night differential pay would be reduced as a result of proposed changes, and the officers’ basic hourly rates of pay.
As shown in the shaded areas in the above table, 148 (32 percent) of the Customs officers receiving night differential pay during fiscal year 1999 at JFK would have had reductions of over $3,000 in night differential pay. In addition, JFK had more officers with higher pay reductions than the other ports because many of its officers worked the 1 p.m.-to-9 p.m. shift. Of the 464 Customs officers who received night differential pay at JFK during fiscal year 1999, 452 (97 percent) worked the 1 p.m.-to-9 p.m. shift sometime during the year. Had H.R. 1833 been in effect, these officers would not have received night differential pay for 5 of the hours they worked that shift.
In contrast, the proposed changes would not have had as much of an impact on Customs officers working at the Baltimore-Washington International Airport and Seaport, a smaller port with fewer officers earning night differential pay. The officers from the Baltimore-Washington International Airport and Seaport who worked night shifts at the airport (there are no night shifts at the seaport) would have had smaller night differential pay reductions than those at JFK. In addition to having fewer officers, the primary reason that 44 (83 percent) of them would have had pay decreases of $500 or less is that most officers only worked a limited number of night shifts at the airport on a periodic, rotating basis. Generally the officers work at the airport for a 1-week period, every 24 weeks.
section_title: Potential Total Night Differential Pay Reductions Under Proposed Changes
paragraphs: As part of our analysis, we also determined the total amount of pay reductions that would have occurred had section 123 (a) and section 123 (b) been in effect during fiscal year 1999 nationally for six frequently worked night shifts and at the five selected ports we analyzed in detail. Nationally, according to COSS, 6,510 Customs officers received about $13.5 million in night differential pay in fiscal year 1999. About $11 million (82 percent) of the $13.5 million was concentrated on six frequently worked night shifts, such as the 4 p.m.-to-12 midnight shift. As shown in table 7, had sections 123 (a) and (b) been in effect, Customs officers would have received about $6 million for working those six shifts, about $5 million less than they received in fiscal year 1999.
At the five ports we analyzed, 1,331 officers would have received $1,693,061 less night differential pay in fiscal year 1999 had the sections 123 (a) and (b) been in effect. These officers represent 20 percent of the total officers who received night differential pay in fiscal year 1999. Section 123 (b) would have resulted in the larger amounts of pay reductions for Customs officers, as shown in table 8.
The above amounts of decreased pay or “savings” that would have occurred as a result of implementation of H.R. 1833 sections 123 (a) and (b) would remain with Customs for additional enforcement purposes. Section 124 of H.R. 1833 would require the Secretary of the Treasury to calculate the savings from section 123, as we did in the above table. Customs, in turn, would be required to use the savings for additional enforcement overtime activities at the ports where the savings occurred. More detailed tables showing the effects of proposed changes at each of the five ports are shown in appendixes II-VI.
section_title: Some Officers Would Receive Additional Night Differential Pay Under the Proposed Changes
paragraphs: While table 5 shows that many Customs officers working at the five selected ports would receive less night differential pay, some officers working early morning shifts (e.g., 4 a.m. to 12 noon and 5 a.m. to 1 p.m.) would receive increased night differential pay. Officers working early morning shifts starting as early as 4 a.m. do not receive any night differential pay under current law. However, under section 123 (b), officers working these early morning shifts would receive night differential pay for hours worked between 4 a.m. and 6 a.m. Had both sections 123 (a) and (b) been in effect during fiscal year 1999, 122 officers at four of the five ports would have received net increases in night differential pay totaling $16,943. For example, at the San Ysidro land border crossing, 50 officers would have received net increases totaling $10,818, while 10 officers at LAX would have received net increases totaling $221.
section_title: Varied Views on Proposed Changes to Customs Officers’ Pay
paragraphs: “… increases in Federal pay rates, the doubling in commercial workloads without commensurate increases in staff, and increases in locations and hours of service requested by the trade community and Congress.” “… pay systems for other federal law enforcement officers include sometimes 25% higher pay for officers on an annual basis, including while they are on leave or during weeks that they do not work irregular hours. Unlike many of these law enforcement officers, Customs inspectors  do not receive the added incentive of a twenty-year retirement.”
NTEU’s comments on the H.R. 1833 premium pay provisions are reproduced in appendix IX.
Similarly, several Customs and NTEU field representatives we interviewed said that they opposed section 123 (a). For example, an acting Customs airport director said that if officers regularly work the night shift, they should get paid at that rate when they take leave, and one supervisor said that officers should not have to worry about losing money if they take their families on a 1-week vacation. On the other hand, other Customs and NTEU field representatives we interviewed said that they supported section 123 (a) because it is not appropriate to pay officers night differential pay when they are on leave.
The Commissioner of Customs also opposed section 123 (b), for the same reason as stated above. The NTEU national president opposed section 123 (b) as well, because of her belief that this provision would negatively impact paychecks and morale among Customs officers nationwide. In her letter to us, she commented that at present, night shifts are popular and sought after by senior officers because the entire shift is paid at a premium rate. She stated that most of these senior officers would not bid for those shifts if the premium were drastically reduced. Rather, they would bid for the day shift, and the less senior, new recruits would be “forced” to work the night shifts.
Similarly, at the field level, all but one of the Customs officers, all five NTEU chapter presidents, several supervisors, and one acting port director we interviewed also opposed section 123 (b). Many of them shared the NTEU national president’s reasons for opposing section 123 (b). However, other Customs field managers and supervisors we interviewed supported this provision. One CMC director said that the current law is not fair because hours worked before 6:00 p.m. are not inconvenient to Customs officers and therefore they should not receive night differential pay. In addition, one port director commented that officers who earn premium pay would not be severely impacted by this provision. He said that they could work more overtime to make up the difference in pay lost due to changes in the premium pay policy.
Regardless of whether they expressed support or opposition, many of the Customs and NTEU officials and officers we interviewed commented that section 123 (b), in particular, would have a significantly adverse effect on morale and would cause problems in staffing their ports’ night shifts because it would greatly decrease officers’ night differential pay. Some of these believed there would be fewer volunteers for the shifts, and managers would then have to “force” officers to work them.
Concerning section 121, which would eliminate premium pay, including night differential pay, from the $30,000 fiscal year overtime and premium pay cap, NTEU’s national president offered qualified support for the provision “on its own,” not as a trade-off for enacting the other two night differential pay provisions. NTEU also commented that, currently, only a small percentage of officers reach the $30,000 annual pay cap, and only those would benefit from this provision. The Commissioner of Customs’ May 25, 1999, letter to the Ranking Member of the House Committee on Ways and Means did not address section 121, and Customs headquarters’ officials were reluctant to provide us with their views on this and other sections of H.R. 1833. “These provisions should be considered in the context of achieving overall consistency in pay, including overtime and its treatment for retirement purposes, between the Customs Service and similarly situated Federal inspection agencies.”
At the field level, the Customs and NTEU representatives we interviewed had a variety of views on section 121. They generally supported this provision because it would allow officers to earn more overtime by not counting premium pay against the fiscal year cap and would allow managers to more easily track and monitor officers’ overtime earnings exclusively, as they approach the cap. Conversely, a reason given by two inspectors and one NTEU chapter president for opposing this provision was that it would primarily benefit supervisors, the only ones that they believed come close to earning the $30,000 annually in overtime and premium pay.
section_title: Agency Comments and Our Evaluation
paragraphs: We requested comments on a draft of this report from the Secretary of the Treasury and the Commissioner of Customs. We also requested comments from NTEU on a section of the draft report pertaining to information NTEU officials provided to us.
On January 9, 2001, Customs provided written comments on the draft report (see app. VIII). Customs said that any concerns that it may have had regarding the audit were addressed through discussions with the audit team. Customs also said that its reluctance to officially comment on provisions in H.R. 1833, as noted in our report, is consistent with administration policy, which holds that OMB is the appropriate executive branch entity to issue statements of the administration’s position on legislative matters.
While Customs identified OMB as the appropriate agency for providing comments on legislative matters, Customs has commented on H.R. 1833, but not directly to us. Instead, as noted in our report, Customs headquarters’ officials gave us a copy of a letter dated May 25, 1999, from the Commissioner to the Ranking Member of the House Committee on Ways and Means that addresses Customs positions on H.R. 1833. In that letter, as we stated earlier in the report, the Commissioner said that Customs is opposed to section 123, but did not address section 121. On May 25, 1999, OMB issued a Statement of Administration Policy that stated, in effect, that the administration opposed section 121 because it believed this section should be considered in the context of achieving overall consistency in pay between Customs and other similarly situated inspection service agencies.
On January 16, 2001, the Department of the Treasury provided written comments on our draft report (see app. VII). The Department said it was in agreement with the comments submitted to us by the U.S. Customs Service.
On January 10, 2001, NTEU’s Director of Legislation informed us that NTEU had no comments on the draft report section dealing with views on the proposed legislative changes that we asked NTEU to review.
As agreed with your office, unless you publicly announce its contents earlier, we plan no additional distribution of this report until 30 days from its issue date. At that time, we will send copies of this report to the Co- Chairman of the Senate Caucus on International Narcotics Control; the Chairman and Ranking Member of the Senate Committee on Finance; the Chairman and Ranking Minority Member of the House Committee on Ways and Means; the Chairman and the Ranking Minority Member, House Ways and Means Subcommittee on Trade; the Secretary of the Treasury; and the Commissioner of Customs. We will make copies available to others upon request.
The key contributors to this report are acknowledged in appendix X. If you or your staff have any questions, please contact Darryl Dutton on (213) 830-1000 or me on (202) 512-8777.
section_title: Appendix I: Objectives, Scope, and Methodology
paragraphs: We were requested to review selected aspects of the U.S. Customs Service officers’ premium pay and determine how night differential pay, in particular, would be affected by proposed legislation introduced in the 106th Congress. Specifically, we had three objectives: (1) compare current law to proposed legislative changes in H.R. 1833 dealing with Customs officers’ pay, (2) determine the extent to which Customs officers’ pay would increase or decrease if proposed changes were enacted, and (3) obtain Customs and the National Treasury Employees Union’s (NTEU) views on the proposed changes. Our review focused primarily on analyzing the effects of sections 123 (a) and (b) of subtitle C of H.R. 1833 dealing with night differential pay. In addition to our analysis, we obtained views on sections 123 (a) and (b) and section 121, a related section dealing with Customs officers’ annual overtime and premium pay cap. We also compared these sections in H.R. 1833 to current law.
Our review included the following sections of subtitle C of H.R. 1833:   section 123 (a), which would prohibit Customs from paying night differential pay to officers when they take annual, sick, or other leave and do not actually work those premium pay hours;   section 123 (b), which would reduce the number of available hours in a day for which night differential pay could be earned; and   section 121, which would remove premium pay, including night differential pay, from the calculation of the $30,000 fiscal year overtime and premium pay cap.
To address our first objective, we reviewed current law, Customs regulations, and relevant arbitration decisions pertaining to Customs officers’ premium pay. We also reviewed proposed changes to Customs officers’ premium pay in subtitle C of H.R. 1833, the legislative history of the proposed changes, and Congressional Research Service reports on H.R. 1833. We then compared the current law to the proposed changes in H.R. 1833 to identify the differences and evaluate how the changes would potentially affect Customs officers’ night differential pay.
To address our second objective, we analyzed the fiscal year 1999 Customs Overtime and Scheduling System (COSS) database, which contains detailed information on officers’ premium pay, including night differential pay. As discussed below, we analyzed information on officers’ night differential pay earnings for fiscal year 1999, focusing our analysis to a limited extent on national data and then more specifically on five judgmentally selected Customs ports of entry. We calculated actual night differential earnings for fiscal year 1999 and then what the officers’ night differential earnings would have been if sections 123 (a) and (b) of H.R. 1833 had been in effect during the year.
To address our third objective, we obtained comments from the Commissioner of Customs and the national president of the National Treasury Employees Union (NTEU) and interviewed Customs managers, supervisors, and officers, and NTEU chapter presidents at five selected ports. More specific information on how we obtained views on pay provisions in H.R. 1833 is discussed below.
subsections: section_title: Analysis of Proposed Changes on Customs Officers’ Night Differential Pay
paragraphs: To determine the extent to which Customs officers’ pay would increase or decrease if provisions in H.R. 1833 affecting night differential pay were enacted, we analyzed all COSS data on regular shifts worked in fiscal year 1999 nationally and then at five selected ports. COSS was designed to record information about each Customs officer’s daily work, including the date the work was performed, the start and stop time, and the type of pay that was earned (regular, night differential, annual leave, etc.), which is indicated by a transaction code. With this information, we were able to determine the amount of night differential pay officers earned in fiscal year 1999, the amount they would have made if each of the relevant provisions of H.R. 1833 were in effect, and the resulting increase or decrease.
While COSS includes pay information on Customs officers and other employees, we limited the analysis to officers—Customs inspectors and canine enforcement officers—because the proposed legislative changes only applied to them. There are 332 unique port codes in the COSS data system, though some of them are office sites (such as headquarters) and subports (such as courier facilities), which are not actual ports. According to COSS, 106 ports paid out no night differential pay in fiscal year 1999, and an additional 5 ports paid out less than $1,000 total for the fiscal year. Only 112 ports paid out over $10,000 in total night differential pay. The amounts of differential paid at each port ranged from zero to $1,758,696, with an average of $59,782 and a median of $9,565. In total, according to COSS, 6,510 Customs officers received about $13.5 million in night differential pay in fiscal year 1999. Table 9 shows the top 100 ports and the amount of night differential pay officers at these ports received in fiscal year 1999.
We were also able to identify the shifts that account for the highest amounts of night differential pay nationally and how the amount of night differential pay for these shifts would be different if the proposed legislation had been in effect. The six shifts shown in table 10 below account for $11,041,983 in night differential, 82 percent of the total $13,510,798 paid to Customs officers nationally in fiscal year 1999.
To understand the effect of the proposed changes on Customs officers, we chose five ports as case studies for the specific analyses based on the number of air and land passengers processed: JFK, LAX, and Miami International Airport because they are three of the largest airports in the country; Baltimore-Washington International Airport and Seaport because it represents a medium-sized port; and San Ysidro because it is the largest land border crossing.
We were able to extract information about how Customs officers were paid using transaction codes provided in COSS that indicate what kind of pay was given for that shift. If an officer worked a shift and was paid night differential for it, the transaction code would be different from another shift where, for example, the officer was on annual leave and received night differential pay.
Using these transaction codes, we calculated the amount of night differential pay received for every shift that received it. Then, we estimated the amount of night differential pay that would have been received for these same shifts had sections 123 (a) or (b) of H.R. 1833 (or both) been in effect in fiscal year 1999, and we calculated the difference between them. These differences were totaled for all the officers at each port and aggregated by officer to determine how much each officer would have gained or lost over the entire fiscal year.
Further, since night differential pay is given for certain shifts and the proposed legislation changes the rules for which shifts qualify to receive night differential pay, we also aggregated the existing night differential pay amounts and proposed night differential amounts by shift, to understand which shifts would be most affected by the proposed changes. A full discussion of the results of these analyses at each of the five ports can be found in appendixes II-VI.
We determined how much increased or decreased night differential pay Customs officers would have received if section 123 (a) alone was in effect, if section 123 (b) alone was in effect, and if both sections were in effect. It is important to note, here, that the effect of these sections together is not just the sum of the effect of each section. For example, under current law, if an officer worked a regularly scheduled shift from 1 p.m. to 9 p.m., the officer would receive 8 hours of night differential pay for days on leave. If section 123 (a) alone was in effect, the officer would receive no night differential pay when taking leave, thus losing 8 hours of night differential pay on each leave day. However, if section 123 (b) alone was in effect, the officer on a leave day would receive 3 hours of night differential pay for the hours between 6 p.m. and 9 p.m., losing 5 hours of night differential pay. In summary, under section 123 (a) alone, the officer would lose 8 hours of night differential pay on leave days. Under section 123 (b) alone the officer would lose 5 hours of night differential pay on leave days. However, if both sections (a) and (b) were in effect, the officer would only lose 8 hours of night differential pay while on leave, not 13 hours. Section 123 (b) would not have an effect on leave days if section 123 (a) was in effect. Therefore, the sum of the effects of each section alone may be larger than the effect of both sections being in effect.
To assess the general reliability of COSS, we reviewed the data for shifts that officers worked and the amount of night differential pay they earned. With few exceptions, the start and stop times and the amount of night differential pay earned were consistent with existing requirements. We also obtained information from Customs about COSS internal controls and data reliability. On the basis of responses to a list of our questions about data reliability, Customs seems to have a number of steps and quality control procedures in place to ensure the reliability of COSS data.
Finally, while patterns of hours worked in future years may change, and our five selected ports are not representative of all ports, our analysis is an indicator of the changes that could occur in pay if provisions such as 123 (a) and (b) were enacted. However, if scheduling patterns at the ports changed or if the proposed legislation would change the way ports scheduled shifts, the effects could be very different from the data presented here.
section_title: Determining Customs and NTEU’s Views on Proposed Changes in Officers’ Pay
paragraphs: Customs headquarters’ officials were reluctant to provide written comments on the premium pay provisions in H.R. 1833, including those pertaining to night differential pay, apparently in view of the sensitivity of the subject. In lieu of written comments, they directed us to a May 25, 1999, letter from the Commissioner to the Ranking Member of the House Ways and Means Committee, which addressed Customs position on section 123 of H.R. 1833, but did not address section 121. We asked for and obtained written comments from the national president of NTEU about the proposed pay provisions in H.R. 1833. In addition, we interviewed officials from the Department of the Treasury, Office of Enforcement; Customs headquarters’ officials; and NTEU headquarters’ officials.
At the field level, we interviewed 54 Customs and NTEU representatives that included 5 Customs Management Center (CMC) officials, 5 port directors, and 5 NTEU chapter presidents to obtain their views on the proposed pay provisions. At the five ports, we also interviewed 17 supervisory officers who were selected by their port’s management and 22 officers who were selected by their NTEU chapter presidents. The results from our limited interviewing at the five selected ports reflect only the views of the Customs and NTEU officials and selected supervisors and officers we interviewed at the CMCs and ports we visited. Therefore, these field results cannot be generalized to Customs nationwide.
We conducted our work from March 2000 through November 2000 in accordance with generally accepted government auditing standards. Customs provided comments on a draft of this report, which are summarized at the end of the letter and reproduced in appendix VIII.
section_title: Appendix II: Effects of Proposed Changes on Officers’ Night Differential Pay at JFK
paragraphs: Of the five ports we used for analysis, Customs officers at JFK would have been the most affected by the changes in the proposed legislation. According to COSS, 679 Customs officers were on the payroll at JFK sometime during fiscal year 1999. Of these, 464 officers (68 percent) received a total of $1,742,224 in night differential pay. Table 11 shows that 181 of the 464 officers (39 percent) earned a total of over $5,000 in night differential pay during the fiscal year.
Section 123 (a) of the proposed legislation would prohibit Customs from paying premium pay, including night differential pay to officers when they take annual, sick, or other leave and do not actually work those premium pay hours. If that section had been in effect in fiscal year 1999, 428 of the 464 officers that received night differential pay in fiscal year 1999 would have made less night differential (see table 12), with most of the officers’ pay reduced by over $500. If section 123 (a) only were in effect in fiscal year 1999, JFK Customs officers would have received $1,436,636 in night differential pay, $305,588 less than they received in fiscal year 1999.
Section 123 (b) would reduce the number of available hours in a day for which night differential pay could be earned in two ways: reducing the time period in which officers were eligible to earn night differential pay and eliminating the majority of hours provision. If section 123 (b) only had been in effect in fiscal year 1999, all 464 officers that earned night differential at JFK would have received less night differential pay overall (see table 13). While 35 percent of these officers would have had a $1,000 or less overall reduction in night differential pay, most officers’ pay would have been reduced by over $1,000. If only section 123 (b) had been in effect, these officers would have earned an estimated total of $896,433 in night differential pay, $845,791 less than they received in fiscal year 1999.
Had both sections 123 (a) and 123 (b) been in effect in fiscal year 1999, all 464 officers would have received less night differential pay. Of those 464 officers, 326 (70 percent), as shown in the shaded areas in table 14 below, would have received decreased night differential pay of more than $1,000 over the entire fiscal year. Overall, the officers would have earned a total of $739,960 in night differential pay, a reduction of $1,002,264 from the actual total amount received in fiscal year 1999. Most of the reduction would have come from the top four “night” shifts regularly scheduled at JFK.
Table 15 shows how much of the decreased pay is accounted for by each of the shifts and, on average, the decrease in night differential pay per shift. The reduction of night differential pay for the 1 p.m.-to-9 p.m. shift accounts for 76 percent of the total reduction in night differential at JFK.
section_title: Appendix III: Effects of Proposed Changes on Officers’ Night Differential Pay at LAX
paragraphs: According to COSS, 423 Customs officers were on the payroll at LAX sometime during fiscal year 1999. Of these, 238 officers (56 percent) earned $489,816 in night differential pay. As shown in the shaded areas in table 16 below, 95 (40 percent) of the 238 officers earned $1,000 or less in night differential pay over the fiscal year, and 11 percent earned over $5,000.
Section 123 (a) of the proposed legislation would prohibit Customs from paying premium pay, including night differential pay, to officers when they take annual, sick, or other leave and do not actually work those premium pay hours. If that section had been in effect in fiscal year 1999, 198 of the 238 officers that received night differential pay in fiscal year 1999 would have made less night differential pay (see table 17). Two-thirds (67 percent) of these officers would have received up to $500 less. If section 123 (a) only were in effect in fiscal year 1999, LAX Customs officers would have received $406,410 in night differential pay, $83,406 less than they received in fiscal year 1999.
Section 123 (b) would reduce the number of available hours in a day for which night differential pay could be earned in two ways: reducing the time period in which officers are eligible to earn night differential pay and eliminating the majority of hours provision. If section 123 (b) only had been in effect in fiscal year 1999, 237 of the 238 officers that earned night differential pay at LAX would have received less night differential pay. In addition, 10 officers would have ended the fiscal year with small net gains in night differential pay. Of these 237 officers, 162 (69 percent), as shown in the shaded areas in table 18, would have had a $1,000 or less overall reduction in night differential pay. If only section 123 (b) was in effect, the officers would have made $302,880 in night differential pay, $186,936 less than they received in fiscal year 1999.
Had both sections 123 (a) and 123 (b) been in effect in fiscal year 1999, 237 of the 238 officers would have received less night differential pay. Of those 237 officers, 97 (41 percent), as shown in the shaded areas in table 19, would have received decreased night differential pay of more than $1,000 over the entire fiscal year. Ten officers would have had a total net gain of $221 in night differential pay for the entire fiscal year. Overall, the officers would have earned a total of $252,097 in night differential pay, a reduction of $237,720 from the amounts they received in fiscal year 1999. Most of the reductions would have come from five night shifts regularly scheduled at LAX. Table 20 shows how much of the difference is accounted for by each of the shifts and, on average, the decrease in night differential pay per shift. Likewise, table 21 shows which shifts account for a gain in night differential pay.
section_title: Appendix IV: Effects of Proposed Changes on Officers’ Night Differential Pay at Miami International Airport
paragraphs: According to COSS, 537 Customs officers were on the payroll at Miami International Airport during fiscal year 1999. Of these, 391 officers (73 percent) earned a total of $553,856 in night differential pay. As shown in the shaded areas in table 22 below, nearly half (181) of these officers earned $1,000 or less in night differential pay over the fiscal year.
Section 123 (a) of the proposed legislation would prohibit Customs from paying premium pay, including night differential pay, to officers when they take annual, sick, or other leave and do not actually work those premium pay hours. If that section had been in effect in fiscal year 1999, 348 of the 391 officers that received night differential pay in fiscal year 1999 would have earned less night differential pay (see table 23). Eighty-six percent of the officers would have received up to $500 or less. If section 123 (a) only had been in effect in fiscal year 1999, Miami Customs officers would have received a total of $458,675 in night differential pay, $95,182 less than they received in fiscal year 1999.
Section 123 (b) would reduce the number of available hours in a day for which night differential pay could be earned in two ways: reducing the time period in which officers are eligible to earn night differential pay and eliminating the majority of hours provision. If section 123 (b) only had been in effect in fiscal year 1999, 355 of the 391 officers that earned night differential pay at Miami International Airport in fiscal year 1999 would have received less night differential pay. Sixty-nine officers would have ended the fiscal year with a net gain in night differential pay. Of these 355 officers (84 percent), as shown in the shaded areas of table 24 below, would have had $1,000 or less overall reduction in night differential pay. If only section 123 (b) had been in effect, Miami Customs officers would have received a total of $383,072 in night differential pay, or $170,784 less than they received in fiscal year 1999.
Had both sections 123 (a) and 123 (b) been in effect in fiscal year 1999, 363 of the 391 officers would have received less night differential pay. Of those 363 officers, 88 (24 percent), as shown in the shaded areas in table 25 below, would have received decreased night differential pay of more than $1,000 over the entire fiscal year. Further, if both sections had been in effect, 61 officers would have gained a total of $5,900 in night differential pay for the entire fiscal year. Overall, Miami Customs officers would have earned a total of $320,776 in night differential pay, a reduction of $233,080 from the amounts they received in fiscal year 1999. Most of the reductions would have come from the top four night shifts regularly scheduled at Miami International Airport. Table 26 shows how much of the difference is accounted for by each of the shifts and, on average, the decrease in night differential pay per shift. Likewise, table 27 shows which shifts account for a gain in night differential pay.
section_title: Appendix V: Effects of Proposed Changes on Officers’ Night Differential Pay at Baltimore- Washington International Airport and Seaport
paragraphs: According to COSS, 62 Customs officers were on the payroll at the Baltimore port sometime during fiscal year 1999. Of these, 53 officers (85 percent) earned $32,412 in night differential pay. As shown in table 28 below, 41 (77 percent) of the 53 officers earned $500 or less in night differential pay over the fiscal year, but none earned over $5,000.
Section 123 (a) of the proposed legislation would prohibit Customs from paying premium pay, including night differential pay, to officers when they take annual, sick, or other leave and do not actually work those premium pay hours. If that section had been in effect in fiscal year 1999, 38 of the 53 officers that received night differential pay in fiscal year 1999 would have made less night differential pay (see table 29). Officers would have received a total of $27,769 in night differential pay, $4,643 less than the actual total amount received in fiscal year 1999.
Section 123 (b) would reduce the number of available hours in a day for which night differential pay could be earned in two ways: reducing the time period that is eligible for premium pay and eliminating the majority of hours provision. If section 123 (b) only had been in effect in fiscal year 1999, all 53 officers that earned night differential pay in fiscal year 1999 would have received less night differential pay (see table 30). One additional officer would have gained night differential pay. Most of these officers (83 percent) would have a $500 or less overall reduction in night differential pay. If only section 123 (b) were in effect, these officers would have made a total of $16,923 in night differential pay, $15,489 less than the actual total amount received in fiscal year 1999.
Had both sections 123 (a) and 123 (b) been in effect in fiscal year 1999, all 53 officers would have received less night differential pay, while one officer would have gained a small amount (a net total of $4.21). Of those 53 officers, 44 (83 percent), as shown in table 31, would have received decreased night differential pay of $500 or less over the entire fiscal year. Overall, the officers would have earned a total of $14,488 in night differential pay, a reduction of $17,924 from the amounts they received in fiscal year 1999. Most of the reductions would have come from the top three night shifts regularly scheduled at Baltimore-Washington International Airport. Table 32 shows how much of the difference is accounted for by each of the shifts and, on average, the decrease in night differential pay per shift.
section_title: Appendix VI: Effects of Proposed Changes on Officers’ Night Differential Pay at San Ysidro Land Border Crossing
paragraphs: According to COSS, 310 Customs officers were on the payroll at San Ysidro land border crossing sometime during fiscal year 1999. Of these, 231 officers (75 percent) earned $495,121 in night differential pay. As shown in the shaded areas in table 33, 93 (40 percent) of these officers earned $1,000 or less in night differential pay over the fiscal year, and 11 percent earned over $5,000.
Section 123 (a) of the proposed legislation would prohibit Customs from paying premium pay, including night differential pay, to officers when they take annual, sick, or other leave and do not actually work those premium pay hours. If that section had been in effect in fiscal year 1999, 202 of the 231 officers that received night differential in fiscal year 1999 would have made less night differential pay (see table 34). Over two-thirds of these officers (69 percent) would have received up to $500 less. If section 123 (a) only were in effect in fiscal year 1999, San Ysidro Customs officers would have received $407,084 in night differential pay, $88,037 less than they received in fiscal year 1999.
Section 123 (b) would reduce the number of available hours in a day for which night differential pay could be earned in two ways: reducing the time period in which officers are eligible to earn night differential pay and eliminating the majority of hours provision. If section 123 (b) only had been in effect in fiscal year 1999, 212 of the 231 officers that earned night differential at San Ysidro would have received less night differential pay. In addition, 50 officers would have ended the fiscal year with net gains in night differential pay. Of these 212 officers, 156 (73 percent), as shown in the shaded areas in table 35, would have had a $1,000 or less overall reduction in night differential pay. If only section 123 (b) had been in effect, the officers would have made $350,023 in night differential pay, $145,098 less than they received in fiscal year 1999.
Had both sections 123 (a) and 123 (b) been in effect in fiscal year 1999, 214 of the 231 officers would have received less night differential pay. Of those 214 officers, 87 (41 percent), as shown in the shaded areas in table 36 below, would have received decreased night differential of more than $1,000 over the entire fiscal year. Further, 50 officers would have gained a net total of $10,818 in night differential pay. Overall, the officers would have earned a total of $293,047 in night differential pay, a reduction of $202,073 from the amounts they received in fiscal year 1999. Most of the reduction would have come from the top five night shifts regularly scheduled at the San Ysidro Land Border Crossing. Table 37 shows how much of the difference is accounted for by each of the shifts and, on average, the decrease in night differential pay per shift. Likewise, table 38 shows which shifts account for a gain in night differential.
section_title: Appendix VII: Comments From the Department of the Treasury
section_title: Appendix VIII: Comments From the U.S. Customs Service
section_title: Appendix IX: Comments on H.R. 1833 From the National Treasury Employees Union
section_title: Appendix X: GAO Contacts and Staff Acknowledgments
subsections: section_title: GAO Contacts
section_title: Acknowledgments
paragraphs: In addition to those named above, Samuel Caldrone, Wendy Simkalo, Kathleen Ebert, James Russell, Wendy Ahmed, David Alexander, Nancy Finley, and Katherine Raheb made key contributions to this report.