UNITED STATES CUSTOMS SERVICE AUTHORIZATION

7/17/2001

THE HOUSE COMMITTEE ON WAYS AND MEANS SUBCOMMITTEE ON TRADE

Chairman Crane, Ranking Member Levin and Members of the Subcommittee, my name is Colleen Kelley, and I am the National President of the National Treasury Employees Union (NTEU). On behalf of more than 150,000 federal employees represented by NTEU, almost 13,000 of whom work for the United States Customs Service, I would like to thank you for this opportunity to present our Union’s views on an authorization bill for the Customs Service, especially as it relates to any legislation which would affect Customs Inspectors night differential pay.

The Customs Service is a front line enforcement agency. Its mission is to ensure the public’s compliance with hundreds of import laws and regulations while stemming the flow of illegal drugs and contraband into the United States. It has been nearly a decade since Congress has passed a Customs authorization bill. Over the last ten years, legitimate U.S. imports have grown at double digit rates, illegal narcotics smugglers have begun to exploit new and sophisticated methods of moving drugs into the country, and Customs employees have been tasked with combating international money-laundering and arms smuggling.

In addition, Customs is the first line of defense against the illegal importation of merchandise manufactured with forced child labor as well as weapons of mass destruction used in terrorist threats. The Agency is also tasked with combating crimes in cyberspace. This type of crime most certainly was not envisioned back in 1789 when the Customs Service began as the collector of imports and duties on products entering the United States. Yet the Agency must keep pace with the criminal element that will stop at nothing to exploit children, launder money and violate intellectual property rights over the Internet. For Customs, the technology and expertise needed to combat cybercrime is as essential as the high tech equipment needed for processing legitimate cargo and passengers at the hundreds of ports of entry around the United States.

In FY 2001, Customs estimates it will process over 500 million land, sea and air passengers. Over 150 million carriers will enter our ports in 2001 and over $1.3 trillion worth of merchandise will be processed at the borders. Notwithstanding the Customs Service’s relatively static workforce and increasing workload over the past five years, this Agency continues to seize more narcotics than all other federal agencies combined. While we expect to keep the drug seizures high throughout 2001 and into the new century, additional resources, personnel and technology are necessary for this effort. The goal is to win the war on drugs without placing an undue burden on trade.

FY 2002 Budget

The Administration has requested a funding level of $1.96 billion, and 17,849 FTEs for fiscal year 2002. While this figure is $98 million more than the budget for Fiscal Year 2001 it only includes the bare minimum or nothing for long-term commitments such as the Automated Commercial Environment, new more aggressive enforcement efforts or the reauthorization of COBRA. Many think that Customs’ funding for FY 2002 is in jeopardy of falling far short of its needs.

While NTEU supports increased authorization of funds for the Customs Service, no increase in funds will actually be available to Customs without increased appropriations. The discretionary spending caps in the House and Senate Budget Resolutions, which have recently passed, will make increased appropriations extremely difficult, if not impossible, to achieve.

Inspection Personnel

Customs Inspectors and Canine Enforcement Officers (CEOs) at land, sea and air ports present the first line of defense to the illegal importation of drugs and contraband across our borders. They are literally on the front lines. They work in career ladder positions that begin at the GS-5 level-- approximately $20,000 per year. Only after two years will an Inspector reach the journeyman level of his or her career from which there is no guaranteed promotion. This journeyman level (GS-9) begins at $30,000 annually and is the highest grade level most Customs Inspectors and CEOs will attain. This level means that at the very height of an Inspector’s career, and even after twenty-five years of dedication to the Customs Service, he or she will make a maximum base salary of about $40,000 per year.

Shifts and Irregular Hours

Not many people recognize the concessions Inspectors and Canine Enforcement Officers make for the Customs Service. Their lives are controlled by their jobs. First, they rarely work regular 9 a.m. to 5 p.m. schedules and, unlike hundreds of thousands of their fellow federal government employees, Customs inspection personnel have little control over the schedules they work in any given two week period.

Cargo shipments and passengers cross our borders at all times of the day and night, and Customs Inspectors must be there to process them. It has been noted over and over again that drug smugglers rarely work from 9-5. Well, neither do the hard-working men and women of the Customs Service. Most Customs Inspectors and CEOs around the country are expected to work at a minimum, three different shift schedules. A shift one week may be as ordinary as 8 a.m. to 4 p.m., but the next week it may be as disruptive to the body clock and family life as 5:15 a.m. to 1:15 p.m. or even 3 a.m. to 11:00 a.m.

According to many Customs Inspectors around the country, the changing times and workdays leave little time for family life. It is a luxury to be at home at the same time as your children and spouse. Often it takes hours at home to unwind from an intense and exhausting day working on the border or at a port. Inspectors regularly sacrifice attendance at school events and teacher conferences, and they rarely have an opportunity to oversee daily or nightly activities at home. Inspectors combat the extreme cold in winter and intense heat in the summer, while they battle sleep problems from working one week on the midnight shift and the next on the early morning shift. Many people can handle a few weeks of this shift work, but could never survive a career of this lifestyle.

In addition to rotating shifts, Inspectors and CEOs have rotating weekends. They basically work a seven-day workweek, and their two days off can fall anywhere within those seven days. The majority of inspection personnel work both days of the weekend as their regular shift. Each individual will learn about his or her shift schedule and days off about ten days in advance of working the schedule. Most official holidays will fall within their regular workweeks. There is never a guarantee that a holiday or weekend will be spent with family or friends.

Overtime

In addition to the unpredictability of their work schedules, Inspectors and Canine Enforcement Officers are usually at the call of Customs management for orders to work overtime. The staffing levels at most ports are not adequate to meet the needs of the port, so situations occur daily that require Inspectors to come in to work on their days off and to stay beyond their shift for overtime assignments. Frequently, they must scramble to find a replacement or struggle to arrange childcare and juggle family commitments. Most Customs Inspectors and CEOs work at least 16 hours of overtime each week. That can mean a seven-day work week or sixteen hour days. This is not an odd occurrence; this is a way of life. There are grave consequences for refusing to come in for overtime, including termination.

COBRA

The COBRA user fee account funds all inspectors and canine enforcement officers’ overtime pay as well as approximately 1400 Customs positions across the country. This account is funded with user fees collected from Air/Sea Passengers except from the Caribbean and Mexico, Commercial Vehicles, Commercial Vessels/Barges and Rail Cars. Customs anticipates collecting $299 million in CORBA fees during FY2001, well below the $305 million they now project in COBRA obligations during FY2001. In fact, in the beginning of FY 2001, Customs had originally anticipated spending approximately $350 million but because of the projected shortfall in the COBRA funding account, Customs has cut back on overtime and held off filling hundreds of vacant positions.

This decrease in COBRA spending has decreased services to all taxpayers and exacerbated the long delays at many border crossings across the country. In fact, as recently as two weeks ago, Customs was prepared to close one of the busiest border bridges in El Paso, Texas on Saturday’s because of the lack of COBRA funding for inspectors. Only after congressional and local intervention did Customs reverse its decision. This one example is just a preview of what will happen in the near future unless Congress responds by reauthorizing COBRA, which is set to expire in September 2003.

COPRA

In 1911, recognizing that the type of work performed by Customs inspection personnel was different from that of the typical federal employee, Congress passed an Act that paid Customs Inspectors for minimum periods of overtime rather than for hours of overtime that they actually worked. This law was referred to as the “1911 Act”. In 1993, determining that the 1911 Act left too much room for mismanagement and abuse of overtime, this Committee was instrumental in replacing the Act with the Customs Officer Pay Reform Act (COPRA). COPRA was drafted to ensure that hours paid to Inspectors bore a more direct relationship to hours worked. Since 1994, COPRA has been the exclusive pay system for Customs officers performing inspection duties. While eliminating the rare instance when a Customs officer could earn 32 hours of pay for 2 hours of overtime work, provisions of COPRA continued to recognize that Customs officers deserved pay incentives and enhanced compensation for their arduous shift work and irregular hours.

The pay system for Customs inspection personnel is not unique in the federal government. Most federal employees who perform law enforcement duties are paid under pay systems tailored to specifically compensate them for their work. This is the case for inspection personnel and criminal investigators of the INS, DEA, FBI, Border Patrol, and National Park Service. INS Inspectors are paid for minimum periods of time regardless of their actual hours worked. The FBI, DEA and other federal law enforcement agencies pay employees premium pay on an annual basis to compensate them for working irregular, unscheduled overtime duty. Sometimes this can amount to an additional 25% increase in their rate of pay although the officer may not work even one hour of overtime or at night during any given week. Other federal criminal investigators and Customs pilots receive a 25% pay differential annually. This pay incentive is known as availability pay and compensates these employees for being available to work outside their regular shifts. Like in the Customs Service, these pay systems are necessary to attract and retain a high quality and professional workforce.

Under COPRA, a Customs Inspector is paid overtime only when he or she works overtime hours as scheduled. The rare instance that an Inspector might receive a paycheck for overtime without having worked the hours occurs only when there is an administrative or judicial proceeding in which Customs is ordered to pay back pay for an overtime assignment unlawfully denied to an employee. This situation is not governed by COPRA. Rather the remedy complies with the Back Pay Act (5 U.S.C. 5596) that governs situations for all federal employees who are the subjects of improper personnel actions. This specific remedy of back pay has been determined by many judges and arbitrators to be the adequate remedy for such violations of law by managers throughout the federal government. According to arbitrators and judges, without a back pay remedy, employers do not have incentive to comply with the applicable law, regulations or collective bargaining agreements that they enter into. Other remedies would be inconsistent with the remedies available to every other federal employee.

Customs recently implemented a new data system called the Customs Overtime Scheduling System (COSS). COSS provides overtime earning information for individual Inspectors and CEOs. The system tracks schedules and assignment data, maintains projected and actual costs, pay cap, equalization, staffing, budgeting, time and attendance and billing information. The system better enables management to monitor the current $30,000 overtime earnings cap. Overtime disputes have dramatically decreased since COSS has been in place. Statutory changes are not needed to redress situations that the Agency can and is managing now.

Premium Pay

In addition to overtime, a second piece of this committee’s reform of the “1911 Act” or COPRA governs premium pay for Customs inspection personnel. Premium pay is a higher rate of pay for working at night, on holidays or on Sundays. For night pay purposes, when a majority of regularly scheduled work hours occurs between 3 p.m. and 12 a.m., an officer receives an additional 15% of the basic pay rate added for the shift. When a majority of regularly scheduled work hours occurs between 11 p.m. and 8 a.m., an officer receives an additional 20% of the basic rate for the entire shift. When an officer’s regularly scheduled work occurs between 7:30 p.m. and 3:30 a.m., he or she will receive 15% premium pay for the hours between 7:30 p.m. to 11:30 p.m. and 20% premium pay for hours between 11:30 p.m. and 3:30 a.m. However, if an Inspector works less than a majority of hours during the night, none of the evening hours are paid at the premium rate. For example, none of the hours in the shift 4 a.m. to noon are compensated as night pay.

The current Customs system for night pay is meant to compensate the inspection personnel for living with unpredictability and constant irregularity in their work schedules. For most Inspectors, daily shifts change every two weeks. That means, one week an Inspector may work the graveyard shift, and the next week he or she may be on from 5:15 a.m. to 1:15 p.m. The unpredictability of these changing work hours often wreaks havoc on family life. Incentive pay systems are not unique to the Customs Service and are in place for most law enforcement jobs where irregular hours and shifts exist.

NTEU believes that the original enactment of COPRA met the intent of Congress and has itself not caused a significant increase in night differential. The need for amendments to the night pay provisions enacted in 1994 are unnecessary.

Congressional intent has been satisfied by the implementation of COPRA. The new methodology provides overtime payments to inspectors for those hours that correspond to their overtime hours worked. In addition, the current schedules available at the ports of entry today, including many additional varied shifts and night shifts, correspond to customers’ needs.

Recent Proposals to Change COPRA

As you know, legislation has been introduced in the House in the 105th and 106th Congresses that would change the night premium pay provisions of COPRA. A Treasury Department Inspector General’s Report from September 1996 has been cited as evidence of the need for these changes. However, at the request of Congressman Charles Rangel, the Treasury Department responded to additional questions surrounding that report. (A copy of this response is attached to my testimony). A closer review of the report shows that it contained glaring inaccuracies and misleading information. According to Treasury, COPRA has successfully responded to the problems associated with the 1911 Act compensation method. For example, 8 years ago, most officers worked an 8 a.m. to 5 p.m. shift and then routinely worked overtime in the evenings. Today, those officers are probably divided between an 8 a.m. and 5 p.m. shift and a 1 p.m. to 9 p.m. shift, or some similar configuration. This would reduce overtime, but increase night differential. Clearly the IG Report was wrong to attribute increases in night differential payments to the COPRA itself. It must be mentioned that the report states that, “there has been an intensified effort in recent years to align the staff in a port to the hours when most of the workload comes into a port. This has caused a significant change in the assignment and times of shifts in many ports.” This point reinforces the fact that COPRA is satisfying congressional intent to coordinate Customs staff with customer needs.

In fact, the previous Commissioner of Customs has stated that, “while Customs is aware of concerns raised about increases in overtime and premium pay costs, there are many contributing factors, other than night differential pay. These factors include increases in overall Federal pay rates, the doubling in commercial workloads with commensurate increases in staff, as well as increases in locations and hours of service requested by the trade community and Congress.” Any attempt to change this part of the compensation package without assessing the entire field of issues is misguided and wrong.

A recent GAO report (#01-304) (attached) requested by Senator Grassley for the Senate Caucus on International Narcotics Control focused on the impact of the night pay provisions included in the most recent Customs authorization bill, HR 1833. This report clearly shows the devastating impact HR 1833 would have had on Customs Inspectors had it become law.

The most significant amendment to COPRA in H.R. 1833, would have changed the night premium pay system from a shift based system to an hour based system. By making this change, HR 1833 would eliminate a basic incentive for inspectors choosing to work the difficult late night shifts for the increased night differential pay.

Proponents of HR 1833 have stated that the system proposed in their bill actually has three more late night shifts (enclosed), which would receive a night pay differential, than the current system. This is true, but what they fail to mention is that these shifts, on average, provide inspectors with an average of only $24 more a week or $4.80 more per day, hardly enough to adequately compensate inspectors for choosing this difficult shifts.

Of the five major ports profiled in the GAO report: JFK Airport in New York, LAX Airport in California, Miami International Airport in Florida, BWI Airport and Seaport in Maryland, and the San Ysidro Land Border Crossing in California 97% of these inspectors would have lost night pay ranging from $500 to over $5000 a year. The report also shows that the impact of HR 1833 would have been nationwide and the loss of night pay across the country would have been close to $5 million, impacting inspectors assigned to sea ports, air ports and land ports.

The night pay changes in the bill are pay cuts -- plain and simple. Inspectors would perform the same work, within the same time frames, and receive less money for that work. Nothing in last year’s bill, HR 1833, would provide a benefit to inspectors to offset this pay cut. In fact, the report stated that the Commissioner of Customs, along with supervisors and some Customs field managers generally opposed the section of HR 1833 which would have changed the current night pay system. Most felt that lowering night differential pay would lower morale and create problems in staffing night shifts at Customs ports.

Premium Pay While In Leave Status

Another amendment included in HR 1833 would have prohibited Customs officers from receiving night differential pay when they take annual, sick, or other leave from regularly scheduled night differential work. Customs officers are by no means unique in the federal government when it comes to night differential pay while in leave status. Federal criminal investigators and other federal employees receive their annual overtime pay rate while they are in a leave status. Plus, all federal employees, including Customs Inspectors, are not compensated at a premium rate when they take leave on a Sunday they would normally work. The small incentive derived from receiving night differential while on leave is a form of compensation for the irregular and unusual hours Customs officers work all year. Their sacrifices are far greater than the slightly higher remuneration they receive while on leave.

Law Enforcement Officer Status

In addition to special pay adjustments, federal employees with law enforcement officer status receive full retirement benefits after 20 years of government service in law enforcement. Even Members of Congress have this benefit, but currently Customs Inspectors and CEOs, who carry guns, make arrests and seize more illegal drugs than any other federal group are denied this benefit. As in past years, NTEU will continue its efforts to enact legislation (H.R. 1841) to give Customs Inspectors and CEOs law enforcement officer status and end this disparity. But in the meantime, the current provisions of the Customs Officer Pay Reform Act must suffice as incentives for the sacrifices Customs Inspectors make to the Customs Service. NTEU believes that changes to this pay system are unnecessary.

Recruitment and Retention

Factors including the uncertainty of irregular hours and the requirement to work overtime have contributed to a high turnover rate among the Customs inspection ranks. These turnover rates lead to increased training costs for the Agency. After being hired by Customs, many young Inspectors complete the training program, gain valuable on the job experience, and then move to positions with the Department of Justice, the Secret Service, the FBI or with state or local government, where they are guaranteed all the benefits of being a law enforcement officer.

Conclusion

Each year, the Customs Service inspectional ranks have been asked to do more work with fewer personnel and resources. Trade and travel has increased at astounding rates, yet Customs inspectional ranks have remained relatively static. More and more, the Customs Service relies on overtime pay to cover the costs of regular shift work during regular hours of operation. The ever increasing number of hours of work assigned to inspectors every week is taking a toll on the health and morale of the officers. They are faced with few days off, sixteen hour days for several days in a row and no end in sight to these grueling schedules. Telling Customs officers that in addition to their increased work load and expanding work schedules, they will receive a pay cut for the non-overtime night shift work they perform, will have a devastating impact on their sense of value to Custom’s mission.

The more than 13,000 Customs employees represented by the NTEU are capable and committed to the Customs mission. They are proud of their part in keeping our neighborhoods safe from drugs and our economy safe from illegal trade. These men and women are deserving of more resources and technology to perform their jobs better and more efficiently.

I applaud this Subcommittee for recognizing the twenty-first century needs of the Customs Service. I urge each of you to visit the Customs ports in your home districts. Talk to the Inspectors and CEOs there to fully comprehend the jobs they do and what their regular work lives are like. Then you may understand why NTEU will support a Customs authorization bill, but will strongly oppose any legislation that would limit the pay or rights of rank and file Customs officers.

Thank you for the opportunity to be here today on behalf of the Customs Service employees to discuss these very important issues.