Following a strong fiscal year, the Albemarle County School Board wants to give full-time employees a $1,000 bonus to help compensate for a difficult year and address concerns related to an upcoming change in how Albemarle pays employees.
“I am certain that such a payment will signal to our workforce how much they are appreciated, and how valuable their presence and their work is with our students, families and other parts of their community,” schools Superintendent Matt Haas told board members Thursday.
The approval of the $1,000 bonus at Thursday’s meeting comes as school employees are voicing concern about a new payroll system set tp start in January that will change how often they are paid from monthly to every other week, with the first paycheck going out Jan. 21. An individual’s total annual pay shouldn’t change, according to county officials.
“Creating more instability after the last two years of constant change and anxiety has created even more stress in our lives,” the Albemarle Education Association wrote in an open letter released Thursday evening. “We feel disrespected and undervalued at a time when there are severe staffing shortages and ever increasing demands on our work lives.”
Nelsie Birch, the county’s chief financial officer, said the biweekly setup is more common, will ensure employees’ pay is accurate and allow overtime and to be processed more quickly, among other benefits. Additionally, the new system will allow new employees to receive a paycheck faster. They currently could wait up to two months for that first paycheck.
“That’s unacceptable,” Birch said.
The change to a new payroll system was triggered by a forensic audit that identified areas of risk for the county, she said.
“What came back was there’s enough risk to the county and to our payroll system and to paying people accurately that we needed to do something pretty dramatic in order to fix it,” Birch said. “And so in doing that, we’re completely changing the way we pay people.”
In the open letter to the School Board and Board of Supervisors, the Albemarle Education Association said changing the timing of paychecks would mean inconsistent pay for the school system’s lowest paid hourly employees, whose pay would then depend on how many school days occur during a two-week pay period rather than a set base pay. They also criticized the timing of the switch and perceived lack of transparency in the process.
AEA added that the changes will disproportionately impact job categories with more workers of color and recent immigrants.
“The school calendar creates unique challenges for hourly workers, and the current pay schedule smooths out the inconsistencies in hours worked during months with scheduled breaks,” AEA wrote. “Your lowest paid hourly employees will move from having consistent checks throughout the year to receiving paychecks that vary depending on how many school days occur during each pay period.”
Employees were notified of the change in September and the county has held four information sessions as part of the “Payroll Clarity Project,” according to the employee website. In every update, officials have said it would not affect someone’s total pay but encouraged employees to contact financial planners, make a list of monthly expenses and fill out a budget worksheet to assist with the planning.
That’s because some groups of employees such as those who are hourly and don’t work year-round won’t receive income for some months of the year when school is not in session.
Bekah Saxon, a local director with the Virginia Education Association, said several school employees currently rely on that monthly paycheck to pay their bills and other expenses. The payroll change creates a bigger issue for the 10-month hourly employees, she said.
“But when you are that close to the bone, you can’t do that,” Saxon said of the budgeting and saving advice.
For teachers, the frequency of pay is the most significant change, but they will still be paid across 12 months of the year.
Division spokesman Phil Giaramita said the school system is committed to preserving pay levels for employees as seen by a recent decision to give teachers with more work days and keep classified staff ons the payroll those days by providing professional development and training.
‘Not a bank’
Changing the frequency of paychecks will likely affect hourly employees who work 10 or 11 months out of the year the most. That group of employees are not exempt from the Fair Labor Standards Act, which sets minimum wage, overtime pay and recordkeeping standards.
For example, nonexempt employees must receive overtime pay when they’ve worked more than 40 hours per work week.
The current system allows those employees to receive a paycheck even when they aren’t working during the summer because their annual pay is spread out over 12 months — a process referred to as “smoothing.” This “pay by exception” system has meant that the county is essentially fronting employees money and complicates the process for figuring out what they should’ve been paid for either time off or overtime.
Some of the practices in place for non-exempt employers were not consistent with federal law and made it difficult to apply the law to those employees.
“Particularly for non-exempt employees, you need to pay them for the work that they’ve done,” Birch said. “We are not a bank, and we shouldn’t be that for employees. Some of our practices almost were like we were your own personal bank. We would hold your money for you, we’d save it for you, and then we pay it out later.”
That’s not a sustainable model, said Birch, who became the CFO in June 2020.
Shortly after Birch started in that new role, she had a forensic audit company conduct a review of the county. Although that audit didn’t find fraudulent behavior, she said it did expose the payroll system as an area of risk in part because of how non-exempt employees were handled. County staff members have been working toward changing the payroll approach since last December, she said.
“I wanted to actually do it months ago, July 1 of this year, because of the criticality and the risk,” Birch said.
The new system, referred to as “positive pay,” will pay people for hours worked as opposed to future or scheduled shifts. Birch said the school division is working on policies to provide clarity about how student holidays and breaks will be handled.
‘Better for everyone’
The bonuses discussed Thursday will be paid out from the school division’s reserve fund, which has $8.6 million available to spend. Haas recommended the $1,000 bonus for full-time employees and some part-timers. Employees who are part-time or less than .7 full-time equivalent would receive $750.
“In light of the fact that our employees have been and are going above and beyond the call of duty during a very challenging time, and they are facing many challenges with their home, including the highest increase in inflation in 30 years that we’ve seen, I’m recommending to the school board that we provide a one-time payment in December,” Haas said of the proposal.
To be eligible, they would have to work for the division as of Nov. 30 and receive a paycheck in December.
The school year has been particularly difficult for employees, administrators have said, because of staffing shortages and the ongoing pandemic. Albemarle already is providing bonuses to school bus drivers and school nurses and giving employees more work days to plan in an attempt to address the school year’s challenges.
“I think this is not only appropriate from a morale circumstance, from an inflation standpoint, but because we are changing the way paychecks are going as a result of our following the county,” board member David Oberg said Thursday. “My hope is that this will help ease some of that pain because it will be a pain for some of our employees with that change [in how they are paid].”
In addition to the bonus, employees also can request a pay advance up to 80 hours to ease the transition. That advance would have to be paid back by June 30 and would be deducted from each 2022 paycheck through June 30.
Local government employees can choose the pay advance or cash out accrued leave.
Birch said they chose 80 hours in order to give employees enough breathing room at the beginning of the transition as well as a manageable amount of money to pay back.
During tests of the new system, Birch said they used the lowest pay rates to ensure the advance and other changes would work for those employees. The team initially looked at a 40-hour advance but that wasn’t enough, she said.
Additionally, employees will receive a special payment Jan. 31 resulting from overtime and stipends from December along with the money that was withheld to pay back in the summer months. The next paycheck would arrive in employees’ accounts Feb. 4.
“So there is enough money there for somebody to be able to handle the transition at the lowest lowest salary range,” she said.
Birch added that Haas and his team are working closely with the University of Virginia Credit Union to set up a plan for employees in which the bank would hold their savings until the summer months.
The local government has $13.2 million available in one-time money after the end of last fiscal year. The Board of Supervisors will discuss next month how to spend that money. On the table are “unprecedented” mid-year salary adjustments, which could help employees with the transition.
“It’s really to ensure legal compliance, minimize risk to the county and our employees around pay, and make that transition as seamless as we can for everyone involved,” Albemarle spokesperson Emily Kilroy said of the overall project.
Kilroy added that the transitory measures being put into place are not required of the county.
“It’s an effort that was prioritized to try to make this as easy on employees as we can knowing that, on the other side, this is better for everyone,” Kilroy said.