YEAR ROUND SALARIED
EMPLOYEES
Payroll Change for Year Round Salaried Employees

What is the change we are making in payroll?



We are creating a lag period in our payroll schedule.
What is a lag period?

The lag period we are creating means that you will be paid for a two week pay
period (beginning on a Sunday through the second Saturday) five days after the
conclusion of that pay period. You will no longer be paid in advance.

Therefore, for new employees, it may take up to two weeks and five days from your
date of hire to receive your first check. You will also receive a check after you
separate from service.
Example of our lag period:
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Pay Period begins Sunday, April 3 and ends Saturday, April 16

Payday for that pay period is Thursday, April 21.
Why are we creating a "lag" payroll?
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To avoid paying employees in advance of time worked:
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Employees assume that they have not been pre-paid and do not understand when
they must work out their contracted days and yet do not receive a check or, worse
yet, owe us money.
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We have spent time explaining the pre-payment to employees and proving it to the
Department of Labor. This change will eliminate these issues.

To eliminate future needs for a 27th pay or the need to skip a payday for
employees who are paid year round, i.e., administrators, custodians, some
office support staff, some technology staff, etc.

To protect our taxpayers:

In the past we have paid employees before they have worked and if they leave midcontract, they usually owe us money. At times it has not been possible to recoup
these overpayments.
How was my pay calculated in FY16
(July 1, 2015 – June 30, 2016)?

Your annual salary was divided by the 27 pay dates that fell between July
1, 2015 and June 30, 2016.

This amount was paid to you every other Thursday, beginning July 2, 2015
and ending June 30, 2016.

On July 2, you had only worked 2 days but received a full paycheck in
advance for your contracted year. YOU WERE OVERPAID.

By June 30 (if all goes according to plan), you will have worked your
contracted days exactly and your pay on June 30 should complete the
payment due for the contract year July 1 through June 30.
How will my biweekly gross pay be calculated for FY17
(July 1, 2016 – June 30, 2017)?

Answer:
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When an employee's annual salary is paid over a full year the salary is based on
365 days (normal year) or 366 days (leap year).

Since each pay period covers 14 days, and 26 x 14 equals only 364, it would
always take a 27th check for you to have received your full annual salary (1 day
more than 26 pay periods in a normal year and 2 days more than 26 pay periods
in a leap year).
Comparison of Leap Year vs Non Leap Year

Leap Year

Annual Salary

$60,000

Non Leap Year

Annual Salary

$60,000
Multiply Factor
14/366 = .038251
Multiply Factor
14/365 = .038356
Biweekly Gross
$2295.06
Biweekly Gross
$2301.36
FY17 Payroll- Example $60,000 salary


Pay Period #1- Pay Date 7/14/16- Pay Period June 26- July 9

Five days from FY16
$819.67 ($60,000 annual salary/366 days in year x 5 days in
pay period)

Nine days from FY17
in
$1,479.45

Total paid on pay date $2,299.12
Pay Dates #2-26 (July 27, 2016 – June 29, 2017)


($60,000 annual salary/365 days in year x 9 days
pay period)
Fourteen days per pay period $2301.37 x 25 pays = $57,534.25
FY18 Pay Period #1- Pay Date 7/13/17 - Pay Period June 25- July 8

Six days from FY17
$986.30

Eight days from FY18 $1,315.07 ($60,000 annual salary/365 days in year x 8 days in
pay period)

Total Paid
$2,301.37
($60,000 annual salary/365 days in year x 6 days in
pay period)
How does creating a lag period affect my
paycheck?

There will be a one-time reduction of 5/366 of your pay for the third payday in June so
that this may be paid on the first payday in July. This creates the 5 day lag.

Instead of being paid in advance as has been our practice, you will now be paid
according to the pay periods on your paychecks and you will have pay owed to you
after you terminate your employment with the District or SAU.

The Business Administrator or HR Director will meet with each employee affected on an
individual basis to give an estimate of the June 30 paycheck.

If any employee feels this will cause a financial hardship, they are eligible for a onetime payroll advance by contacting the Business Administrator or HR Director on a
confidential basis.
Salaried means Salaried

The number of days we are expecting salaried employees to work will not
be noted on the contract with regard to pay. It is an amount for the year.

Those salaried employees who are currently not “contracted” for a full 260
days are still receiving their pay on an annualized schedule.
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Pay will be distributed based on 365 days (or 366 days for leap years).
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Any “non-contracted” days will be considered a leave benefit, not a
reduction in work days.

With regard to the “value” of leave payments for year round salaried
employees, it will be calculated based on their salary/260 days.

Example $60,000/260=$192.31