City Spent $21.9 Million on Overtime Covering Disability Absences, Audit Finds
Covering for sick and injured employees has cost the city tens of millions of dollars annually, with the problem showing signs of growth. In 2025 alone, the city expended nearly $21.9 million on overtime to compensate for short-term disability absences, resulting in more than 518,000 lost work hours.
Audit Highlights Internal Management Issues
A February 25 audit of the city's Abilities Management Program indicates that these substantial costs may be exacerbated by internal operational challenges. The audit identified several critical issues, including poor documentation practices, a lack of systematic follow-up procedures, and inaccuracies in record-keeping dates within the city's administrative systems.
Catherine Sparks, manager of the Human Resources Client Services branch, emphasized the operational necessity of covering these absences. "When employees are unavailable for work, services still need to be delivered," she stated. "In some areas, the work can be redistributed or slowed, but in others such as transit, 311, fire, payroll, and bylaw enforcement, these positions must be backfilled to ensure continuity of service."
Stable Claim Rates Mask Underlying Increases
Excluding a significant spike during the COVID-19 pandemic, claim rates over the past eight years have remained relatively stable and aligned with the growth of the city's workforce. This stability translates to a loss of approximately half a percent in total work hours and 0.2 percent of the city's overall payroll expenditure.
However, Sparks cautioned that while overall claim rates have been stable, they have shown a steady increase since 2020. The Abilities Management Team is currently managing roughly 100 open claims per permanent consultant, which is double the recommended workload. This equates to each member of the seven-person team handling an average of 12 new cases daily, amounting to upwards of 3,000 new cases annually.
Short-Term and Long-Term Disability Claims Process
When employees are unable to work due to illness, injury occurring outside of job duties, or significant mental health challenges, the Human Resources Client Services Branch intervenes to develop alternative work plans. These cases are categorized as short-term disability claims for durations between five and 85 days, while long-term disability claims are managed by a third-party provider.
Audit Findings on Program Effectiveness
Auditors concluded that the Human Resources Client Services branch only "partially" met its objectives. This assessment means that while the department was reviewing disability cases, it failed to document these reviews adequately or provide rationale for its methodologies. Furthermore, auditors found no evidence that the department was evaluating its modified duty program, which assigns payable jobs within the city for employees unable to perform their regular duties due to off-duty injuries or disability claims.
Poor documentation was a recurring theme in the audit findings. Only two percent of cases were reviewed annually from 2023 to 2025. In a sample analysis of 15 cases from 2024, auditors discovered that two cases had incomplete diagnoses for the conditions being claimed. Additionally, an examination of the program's dashboard between 2024 and 2025 revealed 17 instances where the "case decision date" was recorded earlier than the "case received date," along with incorrect birth dates in correspondence sent to an employee's treating physician and an independent medical examiner's report. The audit warns that such errors could lead to the mixing of employee records, posing significant privacy and administrative risks.
The audit underscores the need for improved management practices to address these costly and growing challenges in municipal workforce administration.
