Payroll Realignment 

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Issue

Valencia Community College must correct the current situation with the payroll schedule before the first payday in fiscal year 2005-2006.

Background

If every year had exactly 260 workdays (52 weeks times 5 days = 260), then dividing annual compensation by 26 equal payments would work. Further, we would be paid every two weeks for the previous 10 days and the final paycheck would be issued on the last working day of the year.

However, both life and the calendar are not that simple. Some years have 260 workdays while others have 261, or 262. For each year in which the number of workdays has exceeded 260, we have been paid in advance for the extra day or two in that year. This has caused the pay schedule to be out of sync with the actual days worked. Every year that has had more than 260 days has compounded the problem to the point that we are now paying people eight days in advance. For example the paycheck we received on July 2, 2004, was a full paycheck (for 10days work) but we had only work two days.

Those employees who have left the college since the bi-weekly payroll period was introduced have faced the harsh reality of receiving a final paycheck with fewer accrued vacation days than anticipated and/or actually owing the college money, and having to repay the college for the days for which they were paid in advance. If the situation is not addressed it will continue to grow worse. Since this fiscal year contains 261 workdays, our last paycheck for the year, which will occur on June 17, 2005, will include payment for the nine days through June 30, 2005. If we continue to pay every other week, we will have 27 pay dates in fiscal year 2005-2006. Our first regular pay date would be on July 1, 2005 and the last would fall on June 30, 2006.

Current Situation

Just as leap year helps to adjust the calendar every four years by adding a day to February, we find ourselves in need of an adjustment to our payroll calendar to address the fact that the number of days in each year has and will continue to vary, causing a misalignment between when a pay check is issued and the actual working days for which the check is paying us.

I'm sure you understand that paying our employees in advance is not a good practice and is one that needs to be changed. To that effort, the Payroll Alignment Committee was formed and met in September 2004. It is the recommendation of the committee that we deal with the 27 pay dates in fiscal year 2005-2006 by dividing the annual salary of those employees who are normally paid in 26 payments by 27. It was also agreed that the next step would be to inform the employees of the current situation and our recommendations. The leadership of the various staff councils and/or associations will assume the lead role in informing their respective groups.

The work that remains to be done is developing a solution that will prevent this situation from happening in the future and implementation of the solution. Several alternatives have been discussed, but we want to solicit your input and suggestions about the best way to make the adjustment for fiscal year 2005-2006 and to prevent this from occurring in the future. We want to do this in a manner that minimizes the impact on anyone's personal finances.

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