Law change could drive up personnel costs for SEPTA

SEPTA has 525 engineers, conductors and assistant conductors to run its railroad.

Not one works a 40-hour week.

Because of a shortage of qualified workers, the complex nature of rush-hour scheduling, and SEPTA's desire to limit costs for employee benefits, all engineers and conductors work overtime every week, and are paid accordingly.

The typical engineer or conductor is paid for 67 hours a week. The typical engineer earned $85,450 in 2007, SEPTA records show. Forty-three made more than $100,000 last year, and the top-earning engineer made $140,917.

The typical conductor earned $70,766 last year, and the highest-paid conductor made $133,179.

And SEPTA's crews make less than many of their counterparts on other commuter lines, as SEPTA's hourly wages are among the lowest in the northeastern United States: $27.55 an hour for its most-senior engineers, $25.22 an hour for most-senior conductors, and $21.22 for top-paid assistant conductors.

The costs for SEPTA and other rail operators may soon rise considerably, as a proposed change in federal law would reduce the consecutive hours that railroaders are permitted to work. That could force transit agencies and railroads to hire more engineers and conductors, reducing overtime but driving up costs for training and benefits.

SEPTA might need to hire 75 to 100 more employees, costing it $15 million to $30 million, said Jeanne Neese, SEPTA legislative counsel.

The change in federal law has been approved by the House and the Senate, but the two houses still must reconcile the differences in their bills. Commuter railroads would get a three-year reprieve from the new rules under the Senate version.

The big paychecks and long hours of railroad workers are tied directly to the unusual nature of their jobs. And the costs are boosted by a long history of employee benefits that are more lucrative - and more expensive - for railroad workers than most other workers.

"It appears there is a lot of money being thrown at us, but we actually earn that money," said Tom Dorricott, an engineer on the R3 Media/Elwyn line who is also a union representative for the Brotherhood of Locomotive Engineers and Trainmen. "You don't become an engineer unless you want to make money, because of the stressful hours. You have to work long and odd hours."

And the time away from home can take a toll on family life, rail workers say. "The divorce rate among my guys is astounding," said twice-married Ralph Vasquez, a longtime conductor on the R2 Warminster line, who is general chairman of the conductors' United Transportation Union, Local 61. "Not many guys can work these hours."

For example, one job requires the crew to report to Trenton at 5:45 a.m., Monday through Friday, and get off work at 7:21 p.m., with a 4-hour, 19-minute break after the morning rush hour, and also to report to work at 6:26 a.m. on Sunday and work until 12:04 p.m. For working 52 hours and spending 21.5 hours on break, the crews get paid for 85.5 hours of straight time.

At the maximum hourly rate, that would be about $123,000 a year for an engineer and $112,000 for a conductor.

One assignment for assistant conductors requires reporting for work at 3:50 a.m., Monday through Friday, and getting off work at 6:42 p.m., with a 5 1/2-hour break after the morning rush hour, and working from 6:53 a.m. to 3:49 p.m. on Saturday. That pays 97 hours of straight time, or $107,000 a year, at top hourly rates.

Engineers and conductors bid for their job assignments several times a year, with selections based on seniority. The most recent assignments took effect Sept. 7.

Many railroad operators routinely schedule their crews to work overtime, to cover the morning and evening commutes. But SEPTA is unusual in the extent to which it also requires rail crews to work six days a week, industry and union officials say.

About 67 percent of SEPTA engineers are working six-day weeks, assistant general manager Pat Nowakowski said. "We've got to swing it back the other way and add people," he said. SEPTA needs five to 10 more engineers to reduce the six-day demands to a more acceptable level, he said.

"SEPTA is fairly unique with its number of six-day assignments," said Tom Pontollilo, director of research for the national engineers union. He said SEPTA has been forced to work its crews six days because of a chronic shortage of engineers since it took over regional rail service from Conrail in 1983.

He estimated that at least 100 SEPTA engineers have left for Amtrak, NJ Transit or other better-paying lines in the last decade.

"They started with a shortage of people, and they're still having trouble attracting and retaining people," Pontollilo said of SEPTA.

Neese said train crews "are very hard to come by, and the minute we get them trained, they go to New Jersey Transit for more money."

It takes about nine months to train an engineer at a cost of about $100,000.

SEPTA has calculated that it's cheaper to have fewer rail crews, working longer hours, than more crews working shorter shifts.

"The costs of benefits have exceeded the 50 percent premium that you pay for overtime," Nowakowski said.

It's much the same at other commuter railroads.

"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."