CHAPTER 4

Bus Operator Compensation

Bus operator compensation, including both wages and benefits, is a factor in both recruitment and retention efforts. Uncompetitive wages are often cited as one reason transit agencies have difficulties attracting new bus operators.⁹⁸ Beyond low starting wages, it can take bus operators several years to reach top-tier pay scales, which makes it difficult to retain workers until they have reached a level of seniority.⁹⁹ A number of transit agencies have experimented with raising hiring salaries and reducing the amount of time to reach higher pay scales to attract new operators, with some success.¹⁰⁰

4.1 Themes

Recruitment and Retention Implications for Bus Operator Wages

In its 2019 Wage Rate Database, APTA indicated that the average fixed-route bus operator wage across 107 transit agencies was $21.74 per hour and the average paratransit operator wage across 51 transit agencies was $17.29 per hour. These wages are lower than the average operator wages for commuter rail ($30.53 per hour across 11 transit agencies), heavy rail ($30.64 per hour across eight transit agencies), and light rail ($25.56 per hour across 21 transit agencies.)¹⁰¹ However, there is an indication that some of the differences in wages by type of service may also depend on whether the service is provided in an urban or rural setting and the size of the system.¹⁰²

A 2008 analysis of the Bureau of Labor Statistics and APTA data indicated that bus operator wages are most highly correlated with whether service is provided in an urban or rural area (proximity to or inclusion of an urbanized area in the service area is correlated with higher wages); region of the country (the Mid-Atlantic and Pacific tend to offer higher wages); and the size of the system (larger systems tend to offer higher wages).¹⁰³

The wages described above may not be high enough in many markets to meet livability standards or attract new hires. Standard industry practice for transit agencies may not regularly assess livable wages in their geographic areas. Only 10 percent of respondents in the industry survey indicated that they believe their transit agency conducts livable wage assessments on an annual basis (see Figure 3).

When asked if they thought that current bus operator compensation packages (i.e., wages and benefits combined) negatively affected both recruitment and retention, roughly the same number of respondents in the industry survey agreed with the statement as disagreed with it (see Figure 4).

Respondents who represent labor unions were more likely than non-labor representatives to respond that compensation packages negatively affect recruitment and retention as shown in Tables 6 and 7.

Table 6. Perception that bus operator compensation packages negatively affect recruitment.

Source: TCRP F-28 Industry Survey, Summer 2021.

Figure 5 depicts responses to the industry survey about the methods by which transit agencies use compensation to recruit or retain bus operators. Participants could select multiple strategies. The most common response was that respondents did not know how or whether their transit agency uses compensation to recruit or retain bus operators. In terms of strategies of which participants were aware, the two listed most frequently were signing bonuses and increases in hiring salaries for bus operators. Among those who listed “other,” “none” was the most provided open-ended answer. Additional “other” responses included referral, attendance, or CDL training bonuses; merit pay for non-union employees; full-time status upon being hired; shift differential pay; increase in training pay; cash bonus for completing training;¹⁰⁴ and incentives for extraboard or off-day work. Five respondents indicated that their compensation is strictly tied to what is in the collective bargaining agreement and that the transit agency is unable to offer additional incentives or bonuses beyond that.

Many employers link bus operator wage increases to employment benchmarks, like completing training, the end of a probationary period, and regularly scheduled increases throughout their career, which can incentivize employees to stay with the organization.¹⁰⁵ According to APTA, 64 percent of transit agencies provide annual salary increases as a percentage of base pay for fixed-route bus operators (the average increase that transit agencies provided was 2.68 percent in 2019), and 61 percent of paratransit providers provide annual salary increases as a percentage of base pay (average increase of 2.38 percent).¹⁰⁶

Several participants from different phases of the research indicated that scheduled pay increases often limit the ability of transit agencies to both recruit and retain bus operators. A low starting salary may deter potential bus operators from applying for a job. Even if the starting salary is high enough to attract new recruits, they may not stay on the job if they believe it takes too long to reach top-level wages. Focus group participants discussed integrating incentives with wage progression policies as a way to help bus operators reach top pay faster.

Table 7. Perception that bus operator compensation packages negatively affect retention.

Source: TCRP F-28 Industry Survey, Summer 2021.

While the average number of years to reach top pay that the industry survey respondents believed to be in effect at their respective transit agencies was just under 5 years (4.93 years across 293 respondents), 18 participants listed periods of 15 years or more to reach top wages. As indicated in Figure 5, 31 industry survey participants indicated they believed that reducing the amount of time needed for bus operators to reach higher pay scales was a strategy their transit agency has adopted to help attract or retain bus operators. This is also a finding from stakeholder interviews, focus group discussions, and case study interviews.

Despite some limiting factors posed by collective bargaining agreements (see Chapter 3 for more information), bus operator wages and benefits are often a top priority in labor contract negotiations.¹⁰⁷ In addition to playing a role in negotiating the exact starting bus operator salaries and benefits, unions negotiate cost-of-living adjustments or allowances.¹⁰⁸

Inequities in pay between bus operators at different seniority statuses can occur in transit agencies that do not create and/or routinely reassess well-structured and formalized wage progression plans.

One stakeholder interviewee indicated that this particularly happens in non-union environments without a formalized pay progression plan. Another stakeholder interviewee indicated that wage compression analyses, which determine the extent to which senior employees earn less than newer recruits, are not conducted frequently enough at transit agencies but should be conducted every year across the entire workforce. On the other hand, yet another stakeholder interviewee indicated that the opposite also happens where unions agree to increase wages for senior employees but at the cost of adding time to the wage progression timeline for newer employees.

For bus operators that work the less desirable shifts, some transit agencies offer shift differentials or extra percentages added on top of the normal pay rate. According to APTA’s 2019 Wage Rate Database, 72 percent of fixed-route bus operators and 88 percent of paratransit operators surveyed indicated that they do not provide shift differential compensation.¹⁰⁹

Competition with Other Industries

Transit agencies often compete for jobs with similar industries (like private sector mobility companies) or other industries in the same region (like major factories). As of August 2021, nearly 80 percent of workers in the United States earn at least $15 per hour across other industries, a rate that puts transit in direct competition with these industries.¹¹⁰ Additionally, transit competes with other transportation industries, especially those for which a CDL is required.

The average wage for CDL Heavy and Tractor-Trailer Truck Drivers in 2019 was $22.52.¹¹¹ In its 2019 Wage Rate Database, APTA indicated that the average fixed-route bus operator wage was $21.74 per hour and the average paratransit operator wage was $17.29 per hour.¹¹²

The compensation differential between the public and private sectors has been listed as a major factor in job decisions.¹¹³ In stakeholder interviews, focus group discussions, and case studies, participants indicated that transit agencies compete with other industries for eligible employees. For example, in the GCRTA case study, one interviewee indicated that the greater Cleveland region is starting to see non-driving positions in competing industries move toward a wage of $20 per hour plus bonuses. The transit agency, whose starting wage is $18/hour for bus operators, views those as pulling from its pool of potential applicants and is actively looking at reducing the time it takes to progress through its six-step pay progression or increasing wages at each stage of the progression. In 2021, GCRTA was also looking at reducing the timeframe for new bus operators to become eligible to receive benefits and to have access to tuition reimbursement programs.

Despite competition with other industries, relatively few transit agencies conduct annual wage comparisons with other similar and major employers or industries in their geographic areas. One stakeholder interviewee also raised that many transit agencies do not know where they stand in comparison with other industries because they do not know how to conduct comparative analyses on wages. When asked how frequently they believe that their transit agency conducts wage comparisons with other similar and major employers or industries in their geographic area, only 9 percent of survey participants indicated “annually” (Figure 6).

Benefits

The benefits that go beyond wages factor into a bus operator’s broader compensation package. According to APTA’s 2019 Wage Rate Database, employers pay, on average, 80 percent of healthcare premiums for a single employee (inclusive of dental and vision benefits) for fixed-route bus operators and 75 percent on average for paratransit operators.¹¹⁴

Benefits for bus operators can include things like contributions to an employee’s retirement fund, medical and dental insurance, paid time off, holiday and sick leave, parental leave, and bonuses for achievements or recruiting new bus operators. One survey participant from a transit agency serving suburban and rural geographies estimated that the benefits provided for bus operators amount to roughly $20,000. If transit agencies quantify and publicize the value of their benefits, it might help them attract more job applicants.

There are often differences in the types of benefits between new and senior bus operators. Figure 7 depicts industry survey respondents’ indications of the number of paid vacation days they believe new versus senior bus operators receive at their transit agency.

There may also be differences in the benefits that full-time bus operators receive compared to part-time bus operators. When asked in the industry survey whether they believed part-time bus operators have access to benefits, 50 percent of respondents stated “no.” Among the 35 percent of respondents who stated “yes,” examples of part-time benefits include:

• Healthcare (though this is commonly more expensive for part-time bus operators than it is for full-time bus operators);
• 50 percent of, or otherwise pro-rated benefits that full-time bus operators receive;
• A select number of half-day holidays per year; and
• The same benefits as full-time operators.

Some transit agencies are experimenting with non-traditional benefits. One stakeholder interviewee indicated that younger employees are not as interested in traditional benefits like retirement plans and indicated that instead, transit agencies could consider strategic use of “flexible” benefit plans that target different employee needs. Offerings that may fall into this category are transit agency payment of job-specific certifications, licensures (e.g., CDL), trainings, or college course credits. Per industry survey results, several respondents believed that their transit agencies offer financial incentives, including appreciation bonuses, gift cards for bus operators who receive public compliments, attendance bonuses, and milestone anniversaries, as non-traditional benefits. An industry survey respondent indicated that their transit agency offers incentive pay for potential applicants that already have a CDL.

It is important to inform potential employees about a wide range of benefits. For example, the human resources department at GCRTA educates potential employees about how benefits can prepare them for retirement, how to make payments toward their children’s future educations, and the upward mobility opportunities within the organization.

4.2 Forward-Thinking Approaches

The following approaches were identified in the research and stood out as valuable ideas that transit agencies can consider with respect to addressing bus operator compensation issues:

Offer Incentives for Employees Who Opt Out of Healthcare Programs

Santa Clara VTA offers a Medical Opt-Out Program for employees that are covered by health insurance plans outside of the program provided by the transit agency. Employees who opt out receive a taxable monthly payment on their paychecks of 50 percent of the employer cost.¹¹⁵

Provide Higher Wage Scales to Senior Employees for Undesirable Shifts

One strategy that has been identified to retain both new and more senior employees is to incentivize more tenured bus operators to choose undesirable night shifts and split shifts.¹¹⁶ These less desirable shifts are often given to new employees by default, which may deter them from staying at the organization long-term. Transit agencies can experiment with more evenly distributing these shifts by encouraging some of the existing workforce to take them.

Tie Shorter Wage Progression Periods to Incentives or Shorten Wage Progression Periods Outright

VTA offers eligible bus operators “merit increases” two times during their normal pay progression period. Merit increase eligibility is tied to good attendance, no accidents, and no positive drug or alcohol test results. This incentive can decrease the amount of time it takes to reach top wages by one year.¹¹⁷ In 2019, bus operators at the San Francisco Municipal Transportation Agency (SFMTA) voted on a contract to shorten wage progression from 48 months down to 36 months to attract more bus operators to the job.¹¹⁸ Likewise, PSTA’s pay schedule allows bus operators to reach top pay in 48 months rather than 54 months.

Provide Payment for Unused Vacation Days and Bonuses

FMCTA will pay back a bus operator for any unused vacation days at the end of the year, providing 8 hours in pay for each vacation day. The transit agency also offers several bonuses for their employees. At Thanksgiving, the transit agency gives each full-time bus operator a bonus of $520 and an additional $50 for each year of service. Part-time bus operators receive $260 and an additional $25 for each year of work. There is an additional bonus given at the end of the fiscal year if there are available funds left over in the budget. At the end of FY21, for example, bus operators received $0.75 for each hour worked.

4.3 Resources

• AIHR. “A Guide to Compensation Analysis.” https://www.aihr.com/blog/compensation-analysis/.
• APTA. “Wage Rate Database.” https://www.apta.com/research-technical-resources/transit-statistics/public-transportation-wage-rate-database/.
• Bureau of Labor Statistics. “Overview of BLS Wage Data by Area and Occupation.” https://www.bls.gov/bls/blswage.htm (starting point for benchmarking local wage data in related industries/occupations).
• KFH Group, Inc. 2008. TCRP Report 127: Employee Compensation Guidelines for Transit Providers in Rural and Small Urban Areas. Transportation Research Board of the National Academies, Washington, DC.
• National Transit Database. “Annual Database Transit Agency Employees.” https://www.transit.dot.gov/ntd/ntd-data.