CareerSource centers say nobody benefitted from increased job placements. Payroll records say otherwise.
Posted May 20, 2018 6:06 p.m. EDT
Two Tampa Bay jobs centers have paid $3.1 million in incentives and bonuses in recent years to employees who helped them record more hirings than any workforce board in Florida.
The payout total for CareerSource Pinellas and CareerSource Tampa Bay includes $1.2 million in annual bonuses, with $40,000 going to former president and CEO Edward Peachey, and another $1.9 million to employees who helped the agencies boost their placement numbers since 2014.
For months, board members and elected officials have asked if any CareerSource employee benefitted financially from logging more placements. Administrators batted away the concerns, saying the incentive program was complicated and nobody made significant money from higher jobs numbers.
But detailed payroll records obtained by the Tampa Bay Times after repeated requests over several weeks show those statements were misleading. Several dozen employees earned thousands more each year if they hit placement benchmarks approved by Peachey, who then touted the figures to state and local officials.
The payments raise more questions as the U.S. Department of Labor and the Florida Department of Economic Opportunity try to determine whether the centers inflated hiring reports to the state.
"I couldn't believe that there were exorbitant amounts of money," said Hillsborough County Commissioner and CareerSource Tampa Bay board member Sandy Murman. "What did we get for those incentive dollars? Is it the thousands of jobs that were misreported?"
During a public meeting earlier this year, Peachey told reporters he created the incentive structure but did not know if Florida's other workforce boards had similar programs.
They do not. A recent payroll study conducted by an outside firm for the local jobs centers could not find another workforce agency with a similar incentive program.
Peachey was fired last month, but the incentive system remains as interim leaders try to rebuild the agencies.
Peachey's attorney, Marion Hale, said Peachey did not pay "incentives for placements."
"During the normal course of business, bonuses and incentives were paid to employees as their salaries were kept low and the extra payments were to incentivize them to provide excellent service," Hale wrote in a statement.
As a result of the Times' reporting on CareerSource, the DEO will now require workforce boards to make their compensation structure public, spokeswoman Tiffany Vause wrote in a statement.
"Protecting the taxpayers' dollars and ensuring transparency and accountability in the workforce system continues to be the Florida Department of Economic Opportunity's highest priority," the statement said.
"We expect all local workforce boards to act with integrity and to effectively and efficiently use taxpayers' dollars to carry out their missions. CareerSource Pinellas and CareerSource Tampa Bay need to be forthcoming."
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The CareerSource offices receive millions in federal tax dollars each year to train and connect people to employers.
During Peachey's eight-year tenure running both agencies, they were hailed for how many people they put to work, routinely ranking higher than the state's other 22 job centers.
Since the Times started publishing stories in January about whether the agencies took credit for getting thousands of people hired who never asked for help, CareerSource officials have maintained that no employee earned significant money for logging higher placements.
Yet they long had a system of monthly payouts, outlined in a recent two-page "Staff Performance Incentive Grid."
Workers could earn up to $1,400 each month, or $16,800 annually, for exceeding certain benchmarks, according to the 2017-18 policy. The starting salary for recruiters at the agency was $35,000, according to CareerSource records.
Employees who recorded 76 to 100 people placed into new jobs each month received a $200 bonus. The amount jumped to $500 for 150 hirings.
Workers could also receive a $250 bonus for quickly getting 40 people into jobs. The agencies paid another $200 if workers obtained seven hiring lists from companies, which included names of employees who got jobs but never asked for help from CareerSource. Hit the maximum in every bonus category, the monthly payout was $1,400.
Current and former CareerSource staffers have described a cut-throat environment fueled by the incentives. Recruiters, they said, chased placements to satisfy numbers-obsessed bosses and to increase their take-home pay.
The agency paid the most incentive money in October 2014 -- $72,000 -- to a total of 59 employees. The annual payments decreased from $618,000 in 2014 to $233,000 in 2017, records show. More than a dozen employees told the Times the agencies increased the benchmarks in recent years to make it harder to earn the maximum incentives.
As a result, the payments went from $53,650 in February 2015 to just $5,000 in February 2018, records show.
Human resources director Alice Cobb told several board members during an April meeting that the incentive plan changed in recent years to include a minimum threshold for performance, and said at least one person was fired for not reaching the goal.
"This is a very difficult incentive plan," she said.
Peachey approved the incentive program each year and set performance goals along with his business services director -- most recently Haley Loeun, who was fired in February amid allegations that she and Peachey were romantically involved. Both denied the claims of an inappropriate relationship by current and former staffers.
Peachey also paid separate bonuses to seven employees last fall, totaling about $7,000, after they helped CareerSource Pinellas win $333,333 in Gov. Rick Scott's statewide contest to get residents off unemployment assistance and back to work. Placements were one component in the contest, officials said.
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CareerSource Pinellas and CareerSource Tampa Bay have repeatedly declared that no employee substantially benefited from job placements.
After a public meeting in early February, Peachey told Times reporters that some employees "do receive incentives, but it wouldn't help them to report more to the state. To inflate the numbers? No."
During meetings in February and March, CareerSource attorney Charles Harris and CareerSource Tampa Bay board chair Dick Peck acknowledged the payments but didn't provide details.
Peck declined to tell board members about incentive totals and how the program worked on Feb. 15, saying he wanted more information. Weeks later, he said the program was "nothing anybody is making a lot of money over."
This month, Cobb told the compensation committee that more than 20 employees received incentives since 2016. She did not include totals, and no board member requested them.
The boards learned the full extent of the payments only after the Times requested detailed breakdowns.
Before providing complete records, the agencies repeatedly sent files to the Times that were inaccurate, either missing information or containing duplicate payments for some employees.
Interim leaders attributed the erroneous reports to not being able to reach their part-time payroll coordinator, a former high-ranking employee, who earns $50 an hour working from her home in Apollo Beach.
Murman, the Hillsborough commissioner, said the county has had trouble getting accurate records from the agencies.
"It's so difficult to untangle the mess that was made with the employees and payroll and services," Murman said.
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In the past four years, the local CareerSource agencies have not paid across-the-board raises to staffers. Instead, they handed out annual bonuses for up to 5 percent of workers' salaries, records show.
Managers determined payouts based on job performance. They also received the biggest bonuses each year.
In the past four years, Peachey's bonuses averaged about $10,000 annually.
Loeun earned a total of $21,500 -- the third-most of all employees, payroll records show. In 2017, she received $6,500, the second-highest behind Peachey.
Neither of them responded to a request for comment.
The year-end performance bonuses are not directly tied to placements like the incentive payments for recruiters. But Peachey, records show, touted the placements when requesting a raise in early 2015.
"That's what you have to look at," Peachey said, according to an audio recording of a meeting with board members. "Are we doing what the state and feds want us to do? Are we effective? I think the answer to that is yes."
The DEO said it will hold officials accountable for any wrongdoing uncovered in the investigations.
Investigators have said they have "reasonable suspicion" of potential criminal conduct, though they have not tied that to the incentive program.
"We continue to remain committed to executing a full and thorough investigation and we will hold any failure to act ethically and responsibly, fully accountable," Vause wrote in her statement.
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