Over the past 15 years, 11 seasonal employees at the City of Toronto earned more on long-term disability leave than they did while working, assistant auditor Jane Ying said at an audit committee meeting on Friday.

While payments were correctly calculated for full-time employees, 47 of 56 claims from seasonal staff between 2000 and 2015 were made using inaccurate base salaries. Seasonal employees work, on average, for seven months, but their long-term disability payments were made based on annualized earnings.

As a result, 11 city workers earned $10,500 more in long-term disability payments than in wages. That amounts to $1.4 million, Toronto auditor Beverly Romeo-Beehler said at the meeting, noting that if these overpayments are corrected, the city can recover $430,000 from future payments from seasonal workers who haven’t yet turned 65, the age at which payments stop.

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“It’s not an extra $50 on their salary that you wouldn’t notice,” Councillor Stephen Holyday said. “It just floors me that this has been going on and nobody has come forward… This is an ongoing and growing concern and I don’t know how we’re going to pay for these benefits in the medium and long term.”

It’s the employer’s responsibility to report correct salaries, Mike Wiseman, the city’s director of pension, payroll and employee benefits, said at the meeting. City staff are currently reviewing all 57 claims, and are working with the legal and employee relations teams to determine future payments and any retroactive measures.

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Ying also pointed to a gap between policies in provider Manulife Financial’s plan document and policies in the city’s collective agreements. The plan document allows for employees to file claims, even on new injuries, up to three months after a layoff, while collective agreements do not. One employee became disabled two months after he was laid off, and the city will pay $1.1 million in lifetime costs for this claim. The auditors don’t believe this money is reclaimable.

“We are the stewards of the public’s money,” Romeo-Beehler said. “And it’s important that we oversee, even if we have someone to do the work for us, that we oversee the work.”

The auditor’s report also found 5.8 per cent of the city’s active employees were on long-term disability in 2015, significantly more than the prevalence rate for the Toronto Transit Commission (2.3 per cent) and the Toronto Police Service (0.85 per cent). City employees also had a much lower return-to-work rate than their peers: 3.8 per cent compared to 20 per cent for TTC staff and 11 per cent for police employees.

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Employees on long-term disability receive between 70 and 75 per cent of their regular salary, but don’t have to pay union dues and can accumulate credited service without having to contribute to their pension plan. TTC employees, on the other hand, receive 60 per cent of their regular salary, to a maximum of $2,550 per month.

“The small pay difference between remaining on disability benefits and returning to work, in our view, may not provide a strong financial incentive for employees to return to work,” the report states.

To address the issue, the city should enhance its onsite health resources, Ying said. Currently, Toronto employs an occupational health physician and a psychiatrist to assess return-to-work fitness and identify workplace accommodations, but the former is only available four hours a week and the latter seven hours a month. In comparison, the TTC has an occupational physician and psychiatrist each available for two days a week.

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Copyright © 2018 Transcontinental Media G.P. Originally published on benefitscanada.com

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