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Changes to Government Payroll

Jun 18, 2013

You have no doubt heard about proposed changes to the government payroll system.  The employer is proposing a number of initiatives which will affect members to a greater or lesser extent.   In order to fully understand what will take place (and when) we requested and received a briefing from PWGSC officials.  Here are the results of the briefing.

There are three separate but interrelated initiatives with respect to pay administration: the equalization of bi-weekly deductions; moving to a prorated approach to monthly entitlements such as the bilingual premium; and moving to a “pay-in-arrears” system for employees on a bi-weekly pay cycle.

The equalization of bi-weekly deductions involves changing to a system where deductions are split over the two pay periods in the month.  For example, rather than have union dues deducted on the second payday of the month, the amounts would be split over two pay periods.  This has no impact on your pay but the amounts would be recorded differently on your paystubs.

The second change is the transition to a pro-rated (daily) approach to monthly entitlements.  For example, under the current system an employee entitled to a bilingual bonus who only receives nine days of pay in a month is not entitled receive any portion of the annual $800 bonus. Under the new system, this same employee would receive a daily rate ($3.067) for those nine days in which he or she received pay.

The final and most controversial change is the conversion to a “pay-in-arrears” system for those on a bi-weekly pay cycle.  Under the current system, employees are paid for the two-week period ending on the payday.  This requires the employer to assume that the employee will work in that pay period because the input into the pay system must be made prior to the employee actually working.  In a pay-in-arrears system, the employee is paid two weeks following the end of the pay period in which they are entitled to pay.   A pay-in-arrears system is not uncommon, but the transition has the potential to create a financial hardship for the employee.  Moving from one to the other requires that the first pay immediately following the transition be delayed by two weeks. Thus the employee must wait four weeks for their first pay cheque under the new system.  (The employee does not suffer any loss of pay because all pay cheques are delayed including the last one following severance of employment.)

To their credit PWGSC is not proposing to make employees go four weeks without pay.  Rather, they are proposing that employees continue with their normal pay but their first paycheque under the new system would be considered an “advance” which would be recovered over some (as yet unspecified) period of time.

We have reviewed the collective agreement and there is no language which bars the employer from moving to a “pay-in-arrears” system.  The Pay Administration article only requires that employees be pay for their work and most of Article 54 relates to the management of promotions, demotions, reclassifications and acting assignments.

PWGSC is soliciting feedback from the unions on the changes including the recovery protocol.  Your thoughts on this would be most welcome as we prepare our input to PWGSC.  Feel free to send us your input as soon as possible or contact us with any questions.

In Solidarity,

Daniel J Boulet
Business Manager / Financial Secretary