Chicago paid $26.5 million in overtime to ineligible city employees, inspector general report finds

Chicago's inspector general is urging city departments to do more to monitor overtime payments to city employees, after finding the city paid out tens of millions of dollars in overtime to employees who might not have been eligible over five years.

Tuesday's report from Chicago Inspector General Deborah Witzburg found the city paid 1,027 employees a total of $26.5 million in overtime to potentially ineligible employees from Jan. 1, 2020 through Dec. 31, 2024.

"I want to both recognize that and to underscore the scale of the problem; the City's finances are, needless to say, in an extremely precarious place, and we can ill-afford mistakes which run well into the eight figures," Witzburg said in a statement.

While federal law requires most employees who work more than 40 hours a week to be paid an overtime rate of at least 1.5 times their regular pay, some workers are exempt from that requirement. Most "executive, administrative and professional employees" are not eligible for overtime under federal law. In other cases, some workers do not qualify for overime because they are members of labor unions that did not negotiate such payments as part of their collective bargaining agreements.

Nearly 80% of the potentially improper overtime payments went to employees of five city departments: the Chicago Fire Department, Office of Emergency Management and Communications, Department of Water Management, Chicago Police Department, and Chicago Public Library.

The inspector general's office found 18 city employees were paid more than $250,000 in overtime alone between 2020 and 2024. Combined, those employees were paid more than $6.5 million in overtime, or nearly 25% of all the potentially improper overtime the city paid out over those five years.

Leaders with the city's Department of Finance and Department of Human Resources agreed to a number of recommendations the inspector general made to rein in improper overtime payments, including regular audits of payroll records, improved training on overtime eligibility, and improved coordination between city departments responsible for the most overtime payments.