A new study from Yankee Institute, Overtime Spiking in Connecticut, presents compelling evidence of “overtime spiking” — a deliberate overuse of overtime to boost pension benefits — among state employees. The report highlights a staggering $376 million in overtime pay across six major state agencies in 2024, signaling both systemic inefficiencies and potential abuse of the public compensation system.
The study is the first in the three-part “Union Privilege” series by Yankee Institute with the subsequent editions being released throughout 2025. Its author, Red Jahncke, is founder and CEO of the Townsend Group Intl, LLC and The-Red-Line.com.
Unionized state employee wages have increased from $3.4 billion in FY 2019 when Gov. Ned Lamont took office to $4.5 billion in FY 2024, a one-third increase. Under Lamont, unionized state employees have received six consecutive annual wage increases (two 5.5% increases and four 4.5% increases), compounding to a 33% overall increase. Combining these wage increases with the continued inclusion of overtime in state pension calculations, future pension obligations have surged from $34 billion in FY 2018 to $43 billion in FY 2024.
Despite the wage increases, the report asserts that overall wage costs should not have risen by one-third because many senior employees retired in FY 2022 and were replaced by much lower-paid entry level employees. To analyze the major causes of 33% increase and the corresponding increase in future pension benefits, Yankee Institute and The Townsend Group investigated overtime pay, both as a component of current pay and as a possible cause of fast-rising pension benefit expense.
“Connecticut state employees already enjoy some of the best benefits in the nation and deliberately spiking overtime pay is an abuse of the generosity of hardworking taxpayers,” said Yankee Institute President Carol Platt Liebau. “The families and businesses who fund state worker benefits deserve accountability. Eliminating overtime from pensions and addressing mismanagement are critical steps to rein in runaway compensation costs.”
“While we undertook to investigate possible overtime spiking — and found abuse and evidence highly suggestive of even more — we were surprised to discover that overtime has become a regular component of compensation for the majority of employees in certain state agencies,” Jahncke said. “This practice balloons current payroll costs as employees earn time-and-a-half and escalates the cost of future pensions which are calculated off wages, currently including overtime for many employees.”
Jahncke added, “Several years ago, a consulting study found that rampant absenteeism was leading to widespread overtime. This situation persists, due to ongoing negligence on the part of numerous governors’ administrations.”
Yankee Institute calls for immediate legislative action, endorsing Proposed Bill No. 24 – LCO No. 762, introduced in early 2025, to exclude overtime from pension calculations. Additional recommendations to curb escalating costs include a freeze on state employee wages and a comprehensive employee-level study of overtime across six agencies: the Department of Correction, Department of Development Services, Department of Emergency Services & Public Protection, Department of Children and Families, Department of Transportation, and the Department of Mental Health & Addiction Services.
Download the Full Report Here.
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