USPS labor contracts limit agency flexibility, report finds

Labor contract provisions governing pay and jobs limit the U.S. Postal Service's ability to manage its workforce, according to a new audit.

In the Sept. 19 report, the Postal Service inspector general found that the agency's inability to temporarily assign employees to different jobs, use part-time workers and adjust compensation for mail carriers contribute to higher workforce costs and inefficient human resources management. USPS is limited by contracts with its four unions, the audit said.

For example, managers are unable to assign plant clerks and mail handlers to new crafts based on changing needs, and employees are guaranteed work hours and overtime. In fiscal 2010, the Postal Service spent approximately $29 million in grievance costs related to this contract provision, according to the report. Retail clerks also are guaranteed a 40-hour workweek regardless of workload, though a recent agreement with the American Postal Workers' Union increased flexibility to use part-time employees, the IG said.

Disparate performance measurement and compensation systems for city and rural carriers are costing USPS $2.5 billion annually, the audit found. City carriers are guaranteed full-time work, while rural carriers' routes are adjusted regularly based on changes in mail volume. In addition, a number of routes are covered by contract employees. Wages and benefits are higher for city carriers than for their rural counterparts, leaving room for the Postal Service to streamline its compensation practices, according to the IG.

Postmaster General Pat Donahoe has been pushing for the flexibility to adjust the agency's workforce to match declining mail volumes. USPS also has asked for changes in contract provisions governing layoffs in response to the need to cut 120,000 positions by 2015. That proposal has not gained support from Congress or the Obama administration, however. In releasing its deficit reduction plan, administration officials expressed support for continued use of buyouts and early retirement offers to be funded in part with a potential $6.9 billion Federal Employees Retirement System refund.

In comments on the report, Doug Tulino, USPS vice president of labor relations, wrote that limitations on moving employees to new crafts have significant legal implications but have been made more flexible in recent bargaining processes. In addition, any changes to carrier compensation would meet firm opposition from union leaders, he said.