Update on June 1 SOA Payroll Conversion

Hello GGU Member,

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.

What this means for you now: bi-weekly pay will begin on June 1. While ASEA continues to advocate for your full contractual earnings based on our interpretation of the contract, you might need to make financial adjustments to your monthly budgeting as pay checks will arrive every two weeks, and not necessarily at the beginning, end, or middle of the month.

One source of support—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.

For those interested in the contractual dispute, here is an explanation of the approximate $150 loss for an employee at the middle of the wage table:

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.

Negotiations between the Union and the State have concluded with the letter here https://www.afscmelocal52.org/asea-files/LDR_ASEA-SOA_BWPayroll_21may20.pdf and binding arbitration will begin by the end of June. ASEA made four proposals to the state for actual and in-kind relief from the effects of a bi-weekly conversion on GGU employee 2020 earnings. The state filed an unfair labor practice (ULP) against ASEA in response to our strong commitment to your contract rights. The Alaska Labor Relations Agency (ALRA) reviewed the charge and dismissed it, noting that our ‘hard bargaining’ was not an unfair labor practice but legal and an arguably necessary obligation. I believe ASEA has acted in your best interest throughout these payroll conversion negotiations and I look forward to an arbitrator’s favorable view of the union’s advocacy.

As ASEA continues to advocate for your full earnings, it’s important to do what is necessary to prepare for the June 1 payroll calendar changes. Please note the differences you will receive by pay period and the differences you might see in your annual salary until this issue is resolved. We have updated our Bi-Weekly FAQ sheet to help address additional questions. Please don’t hesitate to contact us with additional questions or issues as they arise. Thank you for all the work you do for Alaska.

In Solidarity,
Jake Metcalfe
Executive Director