Extra cost stops commissioners from changing employee paydays
Wednesday, May 7, 2014 by Mark Richardson
What started out a few weeks ago as a routine request to change the frequency of paychecks to Travis County employees turned into a major disagreement among Commissioners Tuesday over the cost of making such a change. In the end, the court voted 3-2 to keep the current bimonthly pay system.
County Auditor Nicki Riley told Commissioners April 15 that, following a survey of county employees, a majority of them preferred to get their paychecks every two weeks instead of the current system of twice a month. At that time, Commissioners heard all the arguments for changing the system, had a few questions and asked staff to come back in a few weeks with some answers, at which time they would likely give the go-ahead.
However, several of the Commissioners did not like the answer they received Tuesday regarding the long-term costs of changing over to a biweekly pay system. In answer to a question posed last month, Riley told Commissioners that normally, under a biweekly pay system, there are 26 pay periods a year. However, because of the uneven number of days in the year, there is an extra pay period every 11 years, which would cost Travis County an estimated $13.2 million in 2022.
“We would need to set aside $1.65 million a year,” to cover the extra pay period, Riley said. “We have done some research on the local governmental entities that are paying on a biweekly basis. Most fund the extra pay period using salary savings or various reserves. We have found some other entities that use other strategies of paying out, but this involves paying employees less over that year, which I would not recommend.”
Judge Sam Biscoe was immediately skeptical of a pay system that cost an extra amount of taxpayer money each year.
“I cannot recall during the last 10 years that a single employee came to me and said, ‘Judge, I got a problem with getting paid twice a month, and I think we ought to go to the every other week system,’” he said. “And I guess my problem is, I’m having a hard time seeing a problem that the remedy is $1.65 million annually.”
“It may be better for employees, but this is a huge fix for $13 million,” he said. “I think what we ought to do is basically put this on hold … and after Jan. 1 when our lame duck County Judge is going elsewhere, maybe come back to the court if there is a better fix that costs less,” Biscoe said.
Riley pointed out that there are some structural problems with paying twice a month, including difficulty for managers to calculate the exact number hours an employee worked during a pay period, in addition to employees having to wait almost a month to get paid for overtime hours.
She said her department has advocated for a change to biweekly pay for some time. “It is considered a best practice” in the payroll industry, Riley said.
Commissioner Ron Davis said he has also been a proponent of biweekly pay for some time.
“This is not the first time that this court has looked at biweekly (pay),” Davis said. “I’ve been a big supporter of biweekly and there are reasons for it. Now, all is not lost because … of this particular issue of a 27th pay period. The answer is that every year, there is an ending fund balance (in the county budget), usually somewhere around $5 million.”
Commissioner Bruce Todd said he felt there should be a way to make the changeover work.
“This essentially is a budgeting issue and a timing issue,” he said. “Now, is the $1.65 million an easy number to come up with? No. But were we to have made this change years ago, we would be doing that. And Commissioner Davis is right, there is money out there, and to me we ought to do it right.”
However, Commissioner Gerald Daugherty asked Riley if there really was a groundswell of support for the change among county employees.
“The first thing that I asked you, whenever you came to the office and started talking to me about it, (was) how many real complaints are you getting about what we have?” Daugherty said. “You know, I’m now going on eight years in this position, and I’ve never had anybody call me and say they’re not happy with their paycheck, whether it’s their overtime or whatever it is. So, you know, you always think you might be trying to fix something that’s not necessarily broke.”
Riley offered one last plea to Commissioners to consider the change.
“So is this a big issue? Yes, it is a big issue,” she said. ”Overtime is paid very late. For some employees, a month late. New employees do not get a check for a month. Those are real issues, and those will not go away if we do not change to biweekly.”
Todd moved to accept the auditor’s report and give staff the go ahead to set up the new system for a changeover in 2015. That was seconded by Davis.
However, Biscoe offered a substitute motion that essentially instructed staff to maintain the current system until staff could figure out a less expensive way to make the changeover. Commissioner Margaret Gómez seconded that motion.
The substitute was approved and then passed by a 3-2 vote with Biscoe, Gomez and Daugherty in favor.
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