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. 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 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)) 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. 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.