"Most employers, as they work on schedules, do the math, and it may be more cost-efficient to have some or even all employees on overtime," said Kathy Waters, a former commuter-rail executive who is now a vice president at the American Public Transportation Association. "When you consider training, certification and benefits, a lot of the time it may make more sense to pay OT to the experienced employees you have, rather than hiring more employees."
Waters said commuter railroads around the country are struggling with a shortage of engineers and how to balance costs.
"You want to pay the going rate to retain good employees, but nobody wants to pay more than they have to," she said. "Everybody's dealing with it."
Part of the equation is that railroaders' benefits are expensive. Employers and employees covered by the Railroad Retirement Act pay higher retirement taxes than those covered by Social Security, and the benefits are better.
(The average age annuity being paid to career railroad employees at the end of 2007 was $2,405 a month, compared with $1,050 being paid to Social Security-covered retirees.)
Rail employers pay 12.1 percent in "tier II" retirement taxes to finance benefits that exceed Social Security levels. But that tax applies only on earnings up to $75,900, so employers avoid that tax on much of the money paid to high-earning engineers and conductors.
That's an extra incentive to pay overtime, rather than to hire additional workers.
But as SEPTA pushes to add service to meet increasing ridership, and as it prepares to add train cars to its fleet next year, it needs more engineers, Nowakowski said.
The current hours worked, he said, are "higher than I want. You do worry about working people too much. And you worry about the effect on their home life. . . . We have to drive it back down."
Contact staff writer Paul Nussbaum at 215-854-4587 or pnussbaum@phillynews.com.