The new annualization process started July 1, 2008, the beginning of the fiscal year. 4. Will annualization information be displayed on the pay stub?

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1 Annualization FAQ s 1. What is annualization and who is eligible? Annualization is the process of spreading certificated employees annual salary equally over all pay periods in the fiscal year. Basically, an annualized employee works less than 12 months but their salary is spread over 12 months. Annualization is available only to certificated employees on B, C, D, E and K basis. Subsequently, over the course of a year there is often a difference between what is paid and what is earned. To reconcile these possible differences there are annual settlements. 2. What is a settlement? Settlement is the process by which the District either pays out or collects the difference between earned and paid dollars. If the employee fulfills all of his or her assigned hours for the year, the June 30 th settlement will be zero. If the employee does not fulfill all of the assigned hours, the employee will be overpaid causing a negative settlement. 3. When did the new changes take effect? The new annualization process started July 1, 2008, the beginning of the fiscal year. 4. Will annualization information be displayed on the pay stub? There are seven new fields added to the pay stub to provide annualization information. This information is located on the lower right hand portion of the pay stub under two headings, Annualized Status and Hours Summary. ANNUALIZED STATUS There are three monetary fields in the Annualized Status box and the information displayed combines all eligible annualized assignments. Below is a brief description of each field: Earnings: This amount represents the dollars earned based on the actual hours worked and holiday hours (for the assigned calendar) multiplied by the effective hourly rate. 1

2 Paid: This amount represents the actual dollar amount paid including the monthly salary payment and any salary spread amount. Difference: This amount represents the difference between the earnings amount and the paid amount. HOURS SUMMARY There are four fields in the Hours Summary box and the information displayed combines all eligible annualized assignments. Below is a brief description of each field: Contract Hours - This value refers to the number of hours per your assignment. For example, if you are C basis employee (204 day contract) and work 6 hours a day then the contract hours for this basis would be 1224 (6 x 204 days). Reported Hours - These are the hours reported by your timekeeper (including unpaid time) as they correspond to your current assignment and hours per day. These hours will be scaled either up or down in the case of a change in work hours such as, a change from 3 to 6 hours per day. Remaining Hours - These are the remaining hours based on the current assigned work schedule beginning with the start of the next pay period. Fiscal Hours Paid - These are the actual hours paid. This field will be the same as the reported hours if there are no unpaid hours or change in the hours per day. This field will also be used to display the hours paid for certificated nonannualized day-to-day substitute employees. These hours can be used to determine qualification for health benefits. 5. I thought I was already annualized. How is this different? Annualization is not new to LAUSD. Most certificated employees were annualized in the legacy system and continue to be annualized in SAP. This new annualization design simplifies the process by reducing the number of times an employee would be re-annualized due to assignment changes and introduces the concept of spreading salary across the remaining pay periods in the fiscal year to reduce overpayments. 2

3 6. What is spreading? Spreading is a new practice for LAUSD. Spreading reduces the impact to the employees by distributing the payment adjustments across the remaining pay periods in the fiscal year. These adjustments may take the form of salary, latestarter, or settlement spreads. 7. Can you explain the three types of spreads? Salary spreading happens when an employee has a salary change effective July 2 or later. The system will calculate the projected earnable salary based on the new rate and subtract the projected earnable salary based on the old rate and spread the difference over the remaining pay periods in the fiscal year (including the current one.) Late-starter spreading may occur when a new employee starts July 2 nd or later, or if a current employee is reassigned to an eligible annualized position after the beginning of the fiscal year (e.g. a substitute becomes a contract teacher after the beginning of the year or a C-basis employee promotes to a B-basis position). Not all late starters will be annualized or have late starter spreading; it is dependent on the start date as well as on the calendar of the employee s basis and track. Settlement spreading involves spreading a settlement across the remaining pay periods instead of processing it all at once when the annualization event occurs. It may be used for an employee who has a change of basis during the fiscal year or when an employee returns from an unpaid leave in the same fiscal year. 8. What is a late-starter? A late-starter is an employee who begins a B, C, D, E, or K basis assignment July 2 nd or later. Late-starters are most often newly contracted teachers but also include employees who are re-assigned to an eligible annualized position after the beginning of the fiscal year. 9. Is a late-starter eligible for annualization? Yes, later-starters are eligible to have annualized payments. However, the annualization process is designed to calculate whether the employee will be annualized or paid-as-worked. The annualization calculation is dependent on the employee s start date, basis, calendar/ track, and annual salary. 3

4 10. If I start late and miss a part of the school year can I still fulfill my contract hours? New teachers who start late are eligible to make-up time if their calendar allows it. Any hours reported as make up will not be paid-out; however, the make-up hours will be used to increase the employee s reported hours and earned dollars. Any difference will be settled at the end of the fiscal year. 11. If I change tracks or reassign to a school with a different calendar (e.g. 4-track to single-track) after the beginning of the fiscal year, how do I fulfill my contract hours? If the new track or calendar does not provide sufficient hours to fulfill the assignment hours for the fiscal year, you will be eligible to make-up time if the calendar allows for it. Any hours reported as make up will not be paid-out; however, they will be used to increase the employee s reported hours and earned dollars. Any difference will be settled at the end of the fiscal year. If the new track or calendar provides more hours than needed to fulfill the assignment hours for the fiscal year, you still must work all the days of the new track or calendar; any hours beyond the assignment hours will be paid immediately as Z-time. 12. What is paid-as-worked (PAW) and why am I being paid that way? A paid-as-worked employee will be paid their contract hourly rate for the actual hours they work each month. The employee will only receive checks for the months that they have work hours (or appropriate holiday based on assignment basis) but will still receive the correct contract pay (annual salary) by the end of the work year if all assignment hours are worked. An employee is Paid-asworked for the following reasons: a. The employee is approved for a Reduced Work Load leave and is working one semester on, one semester off. b. The employee is not following a District published calendar. c. There is a future-dated settlement action, such as retirement, that caused HR to request that an Opt-out flag be loaded to prevent the employee from being overpaid. d. The employee has an assignment that started after the beginning of the fiscal year (late start) and the first check calculation amount is negative. 4

5 13. How will I get paid if I am paid-as-worked? If an employee is paid-as-worked, the employee will be paid for each hour worked and holidays at the contract hourly rate. The contract hourly rate is calculated as the annual salary divided by the number of hours in the basis assignment. For example, the full contract hours for a C-Basis, 6-hour/day teacher is 1224 hours. If the annual salary is $60,000, the contract hourly rate is $ If I am paid-as-worked (PAW), will I still earn my annual salary? Yes, if you work all the contract hours for your assignment basis. 15. What happens if I'm paid-as-worked and I have a salary change? In the event your salary changes during a fiscal year and you are paid-asworked, your hourly rate of pay will be adjusted to reflect the increase or decrease once the salary change is updated in the system. 16. What happens if I'm annualized and I have a salary change? Salary change does not cause re-annualization as long as the assignment basis remains the same. Employees will continue to receive the same annualized salary. The difference in the salary will be spread over the remaining pay periods including the current pay period and displayed on the pay stub in a separate line. 17. Does the new annualization design affect Z-time? Employees, whether annualized or paid-as-worked can continue to be compensated for hours worked outside their contract hours (known as Z- Time) in the same manner as they have in the past. 18. How do leave of absences affect my annualization? Paid leave of absences do not change an employee s annualization status. However, if your full-pay balance is exhausted, your salary is reduced. Unpaid leave of absences will cause an annualization settlement. At the time of the leave, if the employee s earned dollar amount is greater than the paid dollar amount, the settlement is positive and the employee will be paid the settlement on the next scheduled payday. If the earned dollar amount is less than the paid dollar amount, the settlement is negative. If the negative settlement is more than 5

6 $200, the amount is held until the employee returns from leave and then it will be spread across the remaining pay periods in the fiscal/school year. 19. What happens if I've been annualized and I resign from the District before June 30th? If an annualized employee separates before the end of the fiscal year (June 30th), the employee will settle in full. If the earned dollar amount is greater than the paid dollar amount, the employee will be paid a positive settlement. If the earned dollar amount is less that the paid dollar amount, the negative settlement will be collected in full from the last paycheck. 20. What is an approved District calendar? The District created approximately 74 different calendars in the system to accommodate the instructional needs of the majority of schools and itinerant programs. These additional optional calendars were created by various instructional divisions and offices. However, if annualized eligible employees do not follow a specific calendar, forecasting earned versus paid amounts is extremely difficult and the risk of employees being under- or over- paid is probable. To be assigned and paid on an annualized basis (12 equal payments), the employee must work each day of an approved/published District calendar (same as work schedule ). These calendars have been configured in the payroll system to calculate the contract hours of an assignment which is essential to forecasting and reconciling earned dollar amounts with paid dollar amounts at the end of the school year. 21. What is an assignment basis? A basis is the number of paid days in a school year. These paid days consist of both instructional days and holidays and are translated into assigned work hours. Basis # of Assigned Work Days # of Paid Holidays Annual Hours 6 hours/day Annual Hours 8 hours/day B ,326 hours/yr 1,768 hours/yr C 182/165* 22 1,224 hours/yr 1,632 hours/yr D n/a 1,808 hours/yr E n/a 1,872 hours/yr K n/a 1,712 hours/yr * These assignment hours pertain to Concept 6 employees and consists of 165 work days at 6.6 hours per day, 5 holidays (Spring Recess) at 6.6 hours and 17 holidays at 6 hours per day. 6

7 22. Is it true that if I am not following an approved District calendar I will be paid-as-work? Yes, this is true. If an employee is approved by the supervisor to work an alternate schedule, the annual contract hours cannot be anticipated and therefore annualization is not possible. 23. Where can I see these calendars? The calendars can be found at click Offices: Payroll Services. 24. Can I still be annualized if I work at two cost centers**? Even if one is a single track and the other is multi-track? What calendar(s) do I select? It is possible for an employee to work at two different cost centers and receive annualized payments. Each assignment must be assigned to the same basis and must reflect the appropriate published/approved part-time calendar. If one cost center is single-track and the other is multi-track, then both assignments must reflect a published part-time single-track calendar. Contact your immediate supervisor for appropriate approvals. **This question does not apply to itinerant employees who work at multiple sites but are assigned to and time-reported from one central cost center. 25. Can I work at three different cost centers and still be annualized**? Currently, employees assigned to three or more cost centers do not have the option of annualization. These employees will be paid-as-worked. ** This question does not apply to itinerant employees who work at multiple sites but are assigned to and time-reported from one central cost center. 7