Hasselmo: Dual pay system too costly

University President Nils Hasselmo restated Monday the need for University conversion to a biweekly pay system for all employees.
“We cannot afford to have dual pay systems,” Hasselmo said at his monthly media briefing. Currently two pay systems, a biweekly and a semimonthly system, are in place.
Although he revealed no new information about the conversion, Hasselmo tried to squelch rumors that the change would result in a pay cut. “There has been a lot of misinformation and efforts to scare people on this issue.”
Some members of the American Federal, State, County and Municipal Employees say the conversion would result in a 6 percent pay cut during the year the system would be converted. They say they would lose money because of an extra 10-day gap between the last semimonthly and the first biweekly paycheck.
Pay for the gap would be given to employees when they stop working for the University.
Hasselmo said, “We are going to provide a maximum amount of buffering” to help workers meet living expenses in the absence of the 10 days of pay, referring to interest-free loans the University would offer to ease the delay employees would face.
AFSCME representatives say employees would see a decrease in their actual pay. Because the loan repayments would extend 18 months, representatives also say there would be a pay cut for the year following the conversion.
Some union members are concerned about when they would be taxed on the delayed payment. A representative from Franklin Accounting and Income Tax Service said a delayed payment would not be taxable until the employee received it.
If the University can get all of its employees on one system it can save millions in administrative costs, officials say. But if AFSCME, which has stopped the conversion for its members, is not included in the conversion, two systems would still exist. With two systems the University can only reduce its costs minimally, officials say.

— Brian Bakst