FAQ for Bi-Weekly Payroll Conversion

UPDATE (May 21, 2020)

After months of hard bargaining, ASEA and the State reached impasse in negotiations followed by an agreement to move forward with the transition to a bi-weekly pay cycle. The State made it clear several weeks ago that it would implement bi-weekly pay on June 1, 2020, with or without agreement by ASEA. ASEA challenged the State’s ability to do so and secured a promise to take the remaining disputed issue to binding arbitration by June 30, 2020.  That disputed issue is the annual pay for GGU members during the bi-weekly transition year. ASEA had hoped to get agreement on the pay issue, and now an arbitrator will make a binding decision on how to interpret your contract as it applies to your 2020 annual income.


ORIGINAL MESSAGE (Oct. 25, 2019)


I want to update you on the State’s plan to move to a bi-weekly pay cycle. We’ve been hearing from a number of ASEA members and know this is a concern that many have. We will continue to work to protect your pay and benefits. ASEA Business Agents (Hartlieb, Walters, and Isett) are in active discussions with the Director of Labor Relations (Jared Goecker) and a senior Payroll Specialist (John Foster) over the terms of a required Letter of Agreement (LOA) that is necessary for the conversion to take place. We will never accept any change that violates our contracts or bring our members any harm. 

ASEA Staff will make sure that your net pay and benefits remain intact. ASEA Staff are carefully monitoring leave accrual calculation processes by SOA to ensure that no net loss occurs.
To address additional questions or concerns we are receiving, we put together this FAQ:

1. Is the State allowed to change to a biweekly payroll system? And is it being implemented on June 1, 2020?

The short answer is, yes to both questions. The State has been considering this type of transition since 2013. Multiple unions included language in their contracts that laid the groundwork for this change years ago. 

2. What was the disagreement between the State and ASEA regarding biweekly pay?

The disagreement is that the State has a different interpretation of what GGU members contractually owed per year. While implementation will occur on June 1 ASEA secured an agreement to go into immediate arbitration to resolve this pay issue by the end of June - and hope for a resolution once and for all by the fall.

3. What is the impact on my annual salary?

Right now, under the State's interpretation and implementation plan, GGU members can expect to see an approximate loss of annual income to the tune of $150. The exact amount varies by pay range. ASEA expects a favorable decision following binding arbitration by which point we will update GGU members with immediate next steps following that decision. 

4. How did ASEA determine the $150 amount?

There's not an easy or short answer to this. Here is an explanation:

The contract wage tables feature a semi-monthly amount and a corresponding annualized hourly rate. Salaried employees are paid on semi-monthly increments at the published semi-monthly amounts, while actual hours worked during a semi-monthly pay period vary from 75 to 90. The annualized hourly rate is based on the assumption that employees work 1,950 hours a year, yet the 2020 semi-monthly payroll calendar holds 1,965 hours.

It’s the union’s position that your earnings this year should follow the annual income published in the contract and not be prorated for a loss. The state is seeking to apply the annualized hourly rate for bi-weekly pay periods remaining in 2020—resulting in a shortfall at the end of the year. Further, the last pay period of 2020 in the bi-weekly calendar will end two days earlier than in the semi-monthly calendar, and the state is hoping you’ll continue to consider those two days as 2020 earnings, even at the expense of subtracting them from your 2021 earnings.

Range/Step 14C is generally considered to be the center of the wage tables in terms of earnings. An employee at 14C whose regular work week is 37.5 hours long should earn $47,712.00 in 2020 after 24 pay periods. The state’s bi-weekly payroll conversion beginning June 1, 2020 will result in 25 pay periods and $47,561.50 earned in 2020—a $150.50 loss. Jumping ahead to 2021, after 26 bi-weekly pay periods beginning Dec. 14, 2020, the employee at 14C earns $47,716.50.

The state has argued that you should count earnings from Dec. 14-15, 2020 as 2020 income, even though those earnings won’t appear twice and it is effectively borrowing from your 2021 earnings. If you want to divert earnings from 2021 to hold yourself harmless in 2020 for the state’s conversion, you’ll need to divert the same amount from 2022 to make up the difference in 2021. And on and on. This is a shell game that one might argue gets resolved several years from now when a 27th bi-weekly payroll occurs inside a single year.

**Quick sidebar: for clarity’s sake the demonstration does not include COLAs (There’s a 1% COLA for GGU members on July 1,2020 and July 1, 2021) nor the effect of a $25/month increase in the employer’s health insurance contribution on July 1, 2020.

5. What is the impact on my actual paycheck and leave benefits in a biweekly payroll system?

There will be 26 pay periods per year instead of 24 in a biweekly pay schedule. Because of the additional paychecks, the amount on each check will be less than it would for 24 pay periods. This will impact the amount of money received per month for most months and can result in more money per month in May and October (according to the State’s most recent proposed calendar). ASEA staff will continue to work to find solutions that can help members over the course of this transition if the State decides to move forward in this direction.

6. The calculator the State provided makes it look like I am losing money.

The calculator provided to employees only goes out two decimal places, which is why some are experiencing small deviations (both increases and decreases) in the amount of pay and leave accrued. ASEA staff are aware of this and in communication with the State to ensure they too are aware of this issue. ASEA will not sign any letter of agreement that results in contract violations, including losses of net pay and benefits. ASEA will continue to demand our contracts are honored and defend your net pay and benefits that were hard-fought and agreed on by all parties.

7. I have calculated total amount of leave I am supposed to get on an annual basis and it comes up short of what was promised to me under the collective bargaining agreement. Is the State going to make up that shortage?

Yes, ASEA was able to get you a make-up provision. For each employee, the State is going to calculate the total  amount of leave due for the year and make up the shortage to be reflected on the first paycheck in the following year.

8. Is there anything else that can help me make up for the shortage I can expect until a final decision comes out of arbitration?

One source available to you If you need additional money to help you through the adjustment is your leave bank. Leave cash in rules are waived during June and July. In addition any leave cash-ins during this time will not count towards your yearly limit.

9. How will this impact my eligibility for monthly health care benefits through the ASEA Health Benefits Trust?

There should be no adverse effect on eligibility for health care benefits.

10. How will this impact my dues deductions?

Dues will be calculated for 26 pay periods on lower wages per pay period. The calculation will need to change so that it is revenue-neutral.  

11. How will this impact my retirement benefits?

Retirement benefits are not provided through the CBA. The Div. of Retirement and Benefits should be consulted on this subject by calling (907) 465-4460 | TDD: (907) 465-2805. State employee retirement resources are available online here: http://doa.alaska.gov/drb/retirement/retirement_links.html

12. How will this impact my permanency and Merit Anniversary date?

The new LDR / LOA will provide that employees receive permanency and establish a Merit Anniversary Date on the first day following completion of probation, no longer waiting until the 1st day of the next pay period.  Merit and Increment Steps will come a little sooner.

13. How will this impact my use of Personal Leave?

Under the LDR / LOA, new bargaining unit members can use their personal leave as soon as it is posted, no longer have to wait 30 days.  

As ASEA continues to advocate for your full earnings, it’s important to do what is necessary to prepare for the June 1 pay calendar changes. Please don’t hesitate to contact us with specific questions or issues as they arise: This email address is being protected from spambots. You need JavaScript enabled to view it. or (907) 277-5200. Thank you for all the work you do for Alaska.

In solidarity,

Jake Metcalfe
Executive Director