1 City Council Briefing Status of Biweekly Pay Implementation January 2017 June 21, 2016
Bottom Lines Up Front 2 Convert to Biweekly Payroll January 2017 Next step after successful Arrears May 2014 Includes technology improvements/efficiencies Transition Pay of $1.2 Million in FY17 Budget Employee Preparedness and Education Communication and outreach to departments
3 Pay Every 2 Weeks Payday will be every other Friday First biweekly payday is Friday, January 13, 2017 Covers Dec 22-Jan 4 Pay every 80 hours instead of nominal 86.67 hours Deductions are covered in either 24/26 pay periods No change in work week- stays Thurs through Wed Salary, leave accruals and VRS benefits not changing Employees will continue to be paid for all time worked
4 Advantages for Employees More frequent paydays Every 14 days not 13-18 days Avoids having 3 weekends between paydays that can occur with semimonthly Coordinates pay period with work week Easier to understand for scheduling, shift work, OT Important for FLSA OT paid closer to when earned
Salary Example 5
Advantages for City 6 Increases transparency and accountability - Analytics between pay periods more meaningful - Improves reporting, assists with management oversight - Promotes greater accuracy, reduces risk Maximizes system capabilities - Optimizes system configuration - Lowers time/cost for customization, testing, etc. - Eliminates the need for shadow or manual OT systems Positions City for future technology efficiencies - System-wide scheduling, workforce planning - Automated time /leave e.g. mobile device time entry - Future cost accounting
Biweekly Data 7 The Bureau of Labor Statistics: Over 70% of employers with over 1,000 employees pay on a biweekly schedule Hackett Group: In the United States, most payroll organizations prefer bi-weekly pay cycle as it meets most statutory requirements as well as provides other payroll and accounting benefits.
Efficiencies from Biweekly 8 Aligning pay period with 2 workweeks significantly reduces complexity and risk 80 vs. 86.67 hours per pay period FLSA rules based on a workweek Overtime hours currently computed off line Overtime hours are more automated under biweekly Reduces risk for errors Annual overtime costs exceeds $16 million Even a 3% error rate equates to about $500,000 each year
Communication and Outreach 9 Beam articles and Member Updates Beachnet biweekly intranet page with calendar, FAQS, links, telephone and e-mail assistance information Paycheck Calculator for comparisons of gross and net Departmental Trainings and Outreach Includes classes on money management Biweekly Pay Resource Days External Partners: Bank On, Live Simply, Empower/Great West, ICMA-RC, Beach Municipal FCU * HR, Consolidated Benefits, Finance
Communication and Outreach (continued) Employee Toolkit and Resources Build a family and personal budget Understand and use credit reports Understand where the money goes Navigate a financial disaster Start and continue a savings program Eliminate debt Establish money goals
Communication and Outreach (continued) 11 Calendar of events including: Master your money series Bank On class schedule Eating on a budget How to start building your credit Predatory lending Understanding credit reports Navigating through crisis
Summary 12 Convert to biweekly in January 2017 Pay dates every other Friday VRS and most benefit deductions-24, Medical&HSA 26 Employee outreach, coaching and training to prepare for change in income frequency Employees will have most accurate pay Citizens will have lowest cost to deliver payroll
Special Thank You s 13 Management Leadership Team and Department Directors Human Resources Department Regina Hilliard, Donna Mickley, Bill Edwards, Melissa Bowers Consolidated Benefits Office Linda Matkins and team ComIT InSITE Anne Cummings, Terry Komornik, Debbi Bailey and team ComIT Web Team - Scott Halova and Jason Hall Beach Municipal Federal Credit Union Diana Counts Human Services Department Bank On Lori Irwin Library Department Live Simply Ashley Barrineau