Federal Public Service Compensation & Benefits

[The Bread Guy]

I guess it's one way to "find" money ....

The Conservative government is proposing to claw back four per cent of the public service payroll from its employees as part of its sweeping plan to modernize its pay system and bring it in line with the private sector.

Public Works and Government Services Canada, the federal paymaster and receiver-general, wants to recover two weeks pay from every public servant’s pay cheque for the next year beginning Jan. 1. All new hires will start on the new system when they begin work and would have the first two weeks of their pay withheld.

Employees will get a full, regular pay cheque for the first payday in 2014, but the next 24 payments would be reduced until the equivalent of two weeks is collected. Employees would get a one-time reduction in taxable income less the two weeks and when they leave, quit or retire will get their withheld two-week payment.

This proposed “pay in arrears” plan has triggered a blowback from unions, which want to see a business case for the change, resent they weren’t consulted, and are prepared to legally challenge the proposal if the government proceeds.

“They are using a new word with us. They ‘engage’ us now, not ‘consult’ us. Consultation is sitting down and listening to my opinion and taking that into consideration, They are moving from that to the new phrase ‘engage,’” said Chris Aylward, vice president of the Public Service Alliance of Canada.

A spokesperson for Treasury Board President Tony Clement said no decision has been made on the plan, but unions say they have been briefed on the proposal by Public Works and some have even publicly posted their objections on their websites ....

Ottawa Citizen, 17 Jun 13

 

[Remius]

Is it me or is this a dumb idea?


It looks to me that more and more the government might not be on track to balance the books and are literally checking the seat cushions for change.

 

[dapaterson]

Payment in arrears does make sense - it provides payroll staff time to make adjustments when needed, so the adjustments appear for the dates that are being paid instead of making corrections after the fact.

And once you decide to make that transition, you have two options:

(1) Skip one payrun to shift everyone over to being paid in arrears; or

(2) Make the transition over a period of time to reduce the impact on personnel.

 

[Remius]

Ok, from that point of view I can see that as a good thing.  but...

Given that they are going after sick leave benefits, severance for some, pension contributions, PER implementation etc,

Is clawing back 4% on everyone's pay a good thing to be doing when they are trying to negotciate the other stuff? 

Now, this might be something they've thrown in there to use as a bargaining chip, which would be smart but it looks like they are wanting the Unions to get up in arms.

 

[Shamrock]

I do not have a great deal of faith in this.

An additional 4% loss - no matter how short term - would be sufficient for me to release.

 

[Remius]

I think it's more the PS they are going after.  However what hits the PS normally hits the CF after as well.  For good or for bad.

 

[Edward Campbell]

This is from the article:

    "Public servants are currently paid biweekly for the work they have done, which means the cheque they receive every payday covers the 10 days just worked including the payday Wednesday.

      This means pay cheques are calculated and processed before the work is actually done so they don’t reflect transactions or changes that may have occurred, such as leave without pay, resignation,
      termination, salary increases if promoted.

      Under the new plan, the government wants to pay bureaucrats two weeks after the work is done. Public Works claims this is the industry standard and means employees will be paid for 10 days worked
      from a Thursday to a Wednesday that was completed two weeks earlier."

From what I have read - and I am certainly not an accountant so I may have misunderstood - this is both: a) pretty standard practice amongst large, diverse employers like the insurance industry and major manufacturers; and b) good accounting practice, too.

 

[MeanJean]

I think it's more the PS they are going after.  However what hits the PS normally hits the CF after as well.  For good or for bad.

It will be interesting to see this in execution, as most employees are currently making more now than when they were first hired.  To be fair, the amount withheld/deducted should reflect their initial pay.  If this policy were to translate to the CF, two weeks pay as a private or officer cadet is a lot easier to swallow and sell to the troops.

Now the question is... what are they going to cut next?  No more soup at Stand Easy?

 

[drunknsubmrnr]

I haven't heard of private employers doing this in years.

Normally in private companies there's a cut-off about 2 or 3 days before payroll is processed. Changes made after that (expense reimbursements for example) are processed in the next payroll period. I think that just floating a trial balloon to roll this out in a private company would cause enough unrest to get someone in HR or Accounting fired. You might even have enough dirt to get "constructive dismissal" which would mean you could quit and get severance.

This sounds more like GC payroll methods need to be updated.

 

[Remius]

Well if they are are holding back 4% on pay for the next 24 months it will be at whatever rate they are at and get that total back at the end when they leave.  I would imagine that would be the simplest way of doing it.

 

[Bruce Monkhouse]

Makes perfect sense to this Union guy..........

That is at least the way I read it as they aren't 'losing' any negotiated wages.

 

[Monsoon]

I haven't heard of private employers doing this in years.

Normally in private companies there's a cut-off about 2 or 3 days before payroll is processed. Changes made after that (expense reimbursements for example) are processed in the next payroll period. I think that just floating a trial balloon to roll this out in a private company would cause enough unrest to get someone in HR or Accounting fired. You might even have enough dirt to get "constructive dismissal" which would mean you could quit and get severance.

This sounds more like GC payroll methods need to be updated.

At my last two civilian employers I didn't receive my first payroll until after a month of work because of this; I also didn't receive my first non-stat vacation until after a year of employment. These were both large engineering companies that do a lot of business with the gov't. As a contractor now, I send out my invoice and get paid net 30 days. And as a class "A" reservist, I get paid for the two weeks leading up to the last pay run, entailing an obnoxious pay lag whenever I take short class "B"s (paid immediately) and then switch back to class "A".

This is all very much "no biggie".

 

[Remius]

More or less agree except you know that going in.  People are being told now that they have to take a 4% cut for two years until it balances out.  Mind you we all have until Jan 1st to plan for it.  I'm sure at that point people will cry that the sky is falling because they failed to plan.

 

[drunknsubmrnr]

At my last two civilian employers I didn't receive my first payroll until after a month of work because of this; I also didn't receive my first non-stat vacation until after a year of employment. These were both large engineering companies that do a lot of business with the gov't.

Still not "normal" in the private sector, not even in consulting where the largest barrier to entry is the "float" required for the gap between when they pay you, and when they get paid by the government.  The vacation days are within the employment standards, but not normal. Most employers allow you to start taking earned vacation days about 6 months after you start, and are actually quite keen on you taking all of them by the end of the year since there's usually a ban on accumulating days.

As a contractor now, I send out my invoice and get paid net 30 days.

That's normal in private sector. There's a huge difference between a "Contract for services" and an "Employment contract". You're allowed to do an awful lot of things to contractors that you can't do to employees.

This is all very much "no biggie".

I think you're going to see people quit the PS over it, if not substantial class action suits.

 

[Journeyman]

Yep, everyone wants the government to get a grip on finances.....oh, but not affect me personally.

I think you're going to see people quit the PS over it, if not substantial class action suits.

I doubt you'll see either. 

You'll see lots of hand-wringing, shop stewards saying their single-moms are all on suicide watch, burning effigies of PM Harper......but by the time this is actually implemented, the downtrodden public servants (and the CF, if such a knock-on effect were to occur) will be focused on the Leafs having another losing season and browsing for seat-sales to the Dominican.

 

[mariomike]

Most employers allow you to start taking earned vacation days about 6 months after you start, and are actually quite keen on you taking all of them by the end of the year since there's usually a ban on accumulating days.

Depends on the employer. We were allowed six weeks "Vacation Carry-Over" each year.

 

[drunknsubmrnr]

Yep, everyone wants the government to get a grip on finances.....oh, but not affect me personally.

This doesn't have anything to do with the government getting a "grip on finances". It'll actually cost more to switch to a new system.

 

[drunknsubmrnr]

Depends on the employer. We were allowed six weeks "Vacation Carry-Over" each year.

Private or public sector?

 

[mariomike]

Private or public sector?

Public ( City ).

 

[dapaterson]

This doesn't have anything to do with the government getting a "grip on finances". It'll actually cost more to switch to a new system.

The switch is happening already - federal payroll is currently rolling over to a COTS solution instead of the current custom & costly in-house solution that's labour intensive, slow and unresponsive.  I suspect this proposal is a part of that larger, overall change.

You'll see lots of hand-wringing, shop stewards saying their single-moms are all on suicide watch, burning effigies of PM Harper......

Indeed, given the current government, I suspect that plays into the decision.  They are being aggressive in their dealings with the public service.  "We're getting tough with those over-pampered bureaucrats" is a message they like to sell.  There have been a series of policy decisions - most, in my mind, sound - related to things such as severance pay, pension contributions and sick leave.  In all cases, government has elected to take on a confrontational approach with bargaining agents.