Oakland (Special to ZennieReport.com) – On February 20th, 2025, City of Oakland Office of the City Auditor released a report on the results of an investigation it launched following an anonymous complaint submitted to the City Auditor’s Whistleblower Hotline. The complaint alleged that the City of Oakland (City) was excessively paying employees in the Department of Transportation (DOT) and Department of Public Works (PW) for overtime work.
n July 2023, the Oakland City Auditor’s Office received an anonymous whistleblower complaint alleging that the City paid employees in the Department of Transportation and Public Works Department more in FLSA Overtime Premium Pay than those employees should have been paid. The results of the City Auditor’s Office preliminary review warranted an investigation.
Oakland City Auditor Office Investigation Objectives
The objective of the investigation was to substantiate or refute the allegation by answering the following question:
Did the City pay employees in the Department of Transportation and Public Works Department more in
FLSA Overtime Premium Pay than they should have been paid, and if so, why and by how much?
To meet this objective, we designed and completed an independent investigation. This report summarizes the investigation process and results.
The investigation substantiated the complaint, and found that between January 2018 and May 2024, the City paid DOT and PW employees $1,667,650 in excess pay for overtime work. When considering overtime pay outside of this timeframe and the two departments in question, the City’s excessive pay for overtime work may be far greater.
The specific cause of the excess pay is that the City’s payroll system has been using a method for calculating overtime that differs from what the Fair Labor Standards Act (FLSA) requires. While employers like the City of Oakland have the right to pay employees more than FLSA requires, the investigation found no evidence that overtime pay in excess of FLSA requirements was ever authorized.
Neither the City Charter, Municipal Code, City ordinances, nor labor contracts explain the City’s method for calculating overtime pay. Furthermore, the Finance Department – whose Payroll Division processes payroll and ensures employee compensation aligns with official terms and regulations – could not explain why the City is using this method; neither could the Human Resources Management Department or the City Attorney’s Office.
City Auditor Michael C. Houston stated, “It is important that we recognize the value of our employees who are working overtime to deliver essential City services, but it is my job to call out waste of taxpayer dollars, especially during a time when the City Administration is looking under couch cushions for spare coins. In that spirit, I hope the Administration takes seriously our recommendations to develop, implement, and document overtime formulas in alignment with authoritative regulations and agreements.
This issue of excessive overtime pay warrants the City’s immediate attention because taxpayers have essentially been incurring significant costs that were never approved. I implore the City Administration to ensure that City employees are paid no more and no less than authoritative regulations and agreements require. I will watch closely how the City Administration works to rectify this issue.”
Auditor Houston also recognized the anonymous whistleblower whose complaint prompted the investigation. “As Oakland’s independent City Auditor, it is my job to investigate allegations of fraud, waste, and abuse. This requires whistleblowers to come forward with their concerns. I appreciate the whistleblower who disclosed the City’s excess overtime pay through our Whistleblower Hotline. Without the tip, we may not have become aware of this issue that is significantly costing the City.”