Payroll modernization went off without a hitch thanks to planning and communication
Making tiny tweaks and adjustments to payroll creates a minor clerical headache for most payroll practitioners. An extra hour paid here, a missed overtime hour there. But toss in wholesale changes to how 33,000 workers are paid and it opens up an entirely different world of challenges.
That’s what the British Columbia government was facing as it made a move to streamline payroll processes to pave the way for self-service for its workforce. Until February of this year, the government was paying its employees for work not yet done. An employee’s biweekly cheque was based on one week actually worked and the estimated pay for one week not yet worked. It often resulted in inaccurate payouts to staff because cheques did not reflect days missed, overtime worked or holidays taken during that second week.
According to the B.C. government, that resulted in overpayments of about $650,000 that required time-consuming, labour-intensive administrative adjustments.
Vaughan Dowie, acting assistant deputy minister, corporate services, for the province’s Ministry of Management Services, said the solution was to move the payroll period back one week.
This meant employees would, in essence, lose one week’s pay in 2003. So when the government made the payroll shift in February, it advanced all employees one week’s pay and gave them three options on how to repay it.
“They could have either payed it back in a lump sum in the first pay period following the advance, they could have paid it back by cashing in days out of their vacation bank or they could pay it back based on a payroll deduction scheme where there are 21 equal payments during the course of the calendar year,” said Dowie.
If employees did not indicate a preference for paying back the advance, the government decided the default would be the payroll deduction scheme. That turned out to be the most popular, with 53 per cent of the 33,000 employees choosing to pay back the money through payroll deduction. Taking time out of vacation banks was the second most popular method, with 34 per cent, followed by a lump-sum payback that 13 per cent of employees chose.
There were a few road bumps on the way to implementing the changes. One hurdle was dealing with the numerous unions that represent the province’s employees. Dowie said the unions were co-operative, but there was a lot of groundwork that had to be laid through collective agreements.
“The unions were co-operative with us in terms of talking to us about what were the repayable options,” he said. “We bounced our ideas about how we thought we could make this work and what the timing would be and why we wanted to do it within a calendar year as opposed to over an extended period of time.”
It’s part of a payroll modernization scheme that the province said will save it $3.5 million by the 2004-2005 fiscal year. While the switch in how payroll is done will result in some administrative savings, Dowie said the majority of the savings will come when employee self service is implemented.
“The major bulk of the savings is moving the environment to a self-service model so that employees are able to enter their own leaves and have that approval done by their managers online,” he said. “That means that we have less work that clerks have to do to actually generate the paper around some of those types of transactions.”
Dowie said the switch in how employees are paid went “really well” and he credits that success to one thing: communication, and lots of it.
“It went really well because we had a lot of information out there,” he said. “We had a help desk set up, we got information to employees multiple times, we got it out to people early, followed it up and tried to find options that would work for almost anybody. But the key to it was trying to get the information out.”
That’s what the British Columbia government was facing as it made a move to streamline payroll processes to pave the way for self-service for its workforce. Until February of this year, the government was paying its employees for work not yet done. An employee’s biweekly cheque was based on one week actually worked and the estimated pay for one week not yet worked. It often resulted in inaccurate payouts to staff because cheques did not reflect days missed, overtime worked or holidays taken during that second week.
According to the B.C. government, that resulted in overpayments of about $650,000 that required time-consuming, labour-intensive administrative adjustments.
Vaughan Dowie, acting assistant deputy minister, corporate services, for the province’s Ministry of Management Services, said the solution was to move the payroll period back one week.
This meant employees would, in essence, lose one week’s pay in 2003. So when the government made the payroll shift in February, it advanced all employees one week’s pay and gave them three options on how to repay it.
“They could have either payed it back in a lump sum in the first pay period following the advance, they could have paid it back by cashing in days out of their vacation bank or they could pay it back based on a payroll deduction scheme where there are 21 equal payments during the course of the calendar year,” said Dowie.
If employees did not indicate a preference for paying back the advance, the government decided the default would be the payroll deduction scheme. That turned out to be the most popular, with 53 per cent of the 33,000 employees choosing to pay back the money through payroll deduction. Taking time out of vacation banks was the second most popular method, with 34 per cent, followed by a lump-sum payback that 13 per cent of employees chose.
There were a few road bumps on the way to implementing the changes. One hurdle was dealing with the numerous unions that represent the province’s employees. Dowie said the unions were co-operative, but there was a lot of groundwork that had to be laid through collective agreements.
“The unions were co-operative with us in terms of talking to us about what were the repayable options,” he said. “We bounced our ideas about how we thought we could make this work and what the timing would be and why we wanted to do it within a calendar year as opposed to over an extended period of time.”
It’s part of a payroll modernization scheme that the province said will save it $3.5 million by the 2004-2005 fiscal year. While the switch in how payroll is done will result in some administrative savings, Dowie said the majority of the savings will come when employee self service is implemented.
“The major bulk of the savings is moving the environment to a self-service model so that employees are able to enter their own leaves and have that approval done by their managers online,” he said. “That means that we have less work that clerks have to do to actually generate the paper around some of those types of transactions.”
Dowie said the switch in how employees are paid went “really well” and he credits that success to one thing: communication, and lots of it.
“It went really well because we had a lot of information out there,” he said. “We had a help desk set up, we got information to employees multiple times, we got it out to people early, followed it up and tried to find options that would work for almost anybody. But the key to it was trying to get the information out.”
