Some deductions to vary under biweekly payroll

by Daniel J. Fitzgibbons, Chronicle staff

hen the new e*mpac Human Resources system, known to most employees as PeopleSoft, is launched on March 4, employee paychecks will include two weeks' pay and two weeks worth of deductions, according to Juan A. Jarrett, assistant vice chancellor for Human Resources.

     As a result of the change, a weekly $6 deduction will become a $12 deduction taken out every two weeks. "Because the University will now pay its employees on a biweekly basis, every effort was made to review all payroll deductions to attempt to spread the amount of the deduction evenly over the biweekly payroll period," said Jarrett.

     Under the new system, he said, the majority of deductions will be taken biweekly. "This practice will help even out deductions, so that employees will receive approximately the same net pay in every check."

     However, basic life insurance, optional life insurance and long-term disability insurance will only be deducted in the second pay period of each month. The timing for those deductions is mandated by the state Group Insurance Commission.
Several deductions, such as Dependent Care Assistance Program, annuities, dental insurance, parking fees, retirement and union dues will be taken in every paycheck, even in months with three pay periods.

     The new paychecks will have more specific deduction descriptions, according to Jarrett. For example, annuities that today are listed on the pay advice as "Annuity I" or "Annuity II" will now show the name of the specific annuity in which employees are enrolled.

     Similarly, the before-tax and after-tax components for health insurance, dependent care and other similar deductions which have both before-tax and after-tax elements will be displayed separately on the pay advice form, he said.

     Pre-tax deductions will still be deducted from pay before taxes are taken out.
Jarrett advises employees to keep in mind that some differences in deductions and net pay may be due to changes such as step increases, tax law changes or union contract negotiations. These factors are not related to the move to biweekly pay, but may occur in the same general timeframe, he said.

     The switch to biweekly payroll also will bring changes in how vacation and other leave times are accrued, according to Jarrett.

     In general, there will be no gain or loss in the amount of time employees accrue. It will simply accrue differently.

     Vacation time will be earned according to each designated hour paid through the payroll system (regular, vacation, sick, etc.). Vacation time will accrue and be awarded in each pay period, rather than on a monthly basis. In essence, he said, employees will accrue these benefits more quickly, since the accruals are posted biweekly instead of at the end of the last payroll period of each month.

     Longevity will be factored into vacation time for all campuses, rather than being displayed as a separate line item as it is today on several campuses. The longevity increment is based on length of service, as determined by a fixed serviced date, that is, an employee's date of hire .

     This means that rather than receiving a longevity credit at the beginning of the year, the vacation accrual rate will be raised for those employees who are eligible for the longevity increment, said Jarrett. Also, the value of longevity will accrue in each pay period, as part of vacation time and will not be displayed separately.

     Like vacation time, sick time also will accrue according to designated hours paid and will be awarded biweekly, rather than being awarded monthly as it is in the current HRMIS system.

     Personal time will continue to accrue on an annual basis, as it does today. However, the accrual and usage period will be based on a calendar year rather than the fiscal year. For this reason, 1.5 times the annual personal time allowance was awarded to all eligible employees last July 1 to accommodate the transition to the calendar year method.

     All of the changes conform more closely to Commonwealth of Massachusetts practices, he said, and reflect efforts to employ more consistent practices across the University systems.

Dates to remember:

March 1: Last weekly payroll checks or direct deposits issued.

March 8: No payroll checks or direct deposits issued.

March 15: First biweekly payroll checks or direct deposits issued.

March 29: Next biweekly payroll checks or direct deposits issued.