E-mail sets off controversyover proposed pay switch

by Jessica Steeno

An e-mail message circulating among University union employees states that changing from a semimonthly to a biweekly pay schedule would result in a 6 percent pay cut, but University officials refute the claim.
About 4,500 clerical and technical workers, members of the American Federation of State, County and Municipal Employees, face a 10-day delay in their pay if the University converts all of its workers to the biweekly system.
On the semimonthly system, most union employees are paid on the 15th and the last day of every month, the same day their pay period ends. For other University workers who are paid under the biweekly system, each pay period ends on a Sunday, but workers don’t get paid until 10 days later on Wednesday.
Workers will not be paid for those 10 days of work until they leave the University, which might not be during the next fiscal year. Union members consider that delay a 6 percent loss for the year.
Richard Pfutzenreuter, associate vice president for Budget and Finance at the University, disagreed.
“Is a delay a pay cut?” he asked.
Pfutzenreuter said the union is ignoring the fact that 10 days later employees will be paid for the days they claim to have lost.
At a meeting June 18 between University officials and AFSCME representatives , union representatives stopped the payroll conversion because it was in violation of their contract with the University.
To help employees adjust to temporarily losing 10 days of pay, the University is offering employees who convert to biweekly payroll an interest-free loan. The loan would equal the amount the employee normally receives in a semimonthly pay period and would be paid back over a period of 18 pay periods.
The union is opposed to the loan in its current form. AFSCME representatives say many employees cannot afford the loan payments, which would be $46 per pay period.
“We would consider a loan that wouldn’t be paid back until the employee leaves the University,” said Phyllis Walker, president of the AFSCME Local 3800. “We would also consider a lump sum payment that wouldn’t have to be paid back at all.”
“I would have to re-budget my whole life,” one AFSCME member said at an informational meeting July 7 for AFSCME employees.
At that meeting, union representatives said the University’s reasons for switching to biweekly payroll were financial. Kathy Kleckner, former president of the AFSCME Local 3800 said according to the union’s calculations, the University would be making $2.5 million in interest on the 10-day pay delay.
“Generally the University acts in their own best interests,” Walker said.
Pfutzenreuter disagreed again, saying the University could make about $250,000 from the delay, but that the reasons for conversion were not financial.
Most of the money the University uses to pay its employees comes from state and federal funds, and the delay would simply mean the University wouldn’t draw the necessary funds until they were needed, he said.
“Having one payroll system at the University will simplify lots of things,” he said.
Helen Pladsen, Payroll Services manager, said vacation time and sick leave pay would be simplified under the biweekly system.
“Taking people to delayed payroll will allow us to dock people who don’t come to work,” she said. “We can’t do that on the current payroll.”
Under the semimonthly payroll, paychecks must be processed before employees have actually worked for the full pay period. Their pay is processed as if they had worked all of the days in the pay period, but sometimes employees miss workdays while the paychecks are being processed. Because of this, employees sometimes get paid for hours they did not work.
Pfutzenreuter said the payroll conversion would also help in the management of funds the University gets from the federal government because the school wouldn’t have to deal with two different pay systems.
But the University cannot impose the payroll conversion without union approval.
“We have to negotiate this with them,” Pfutzenreuter said. “We couldn’t impose it, we have to get the union to accept this.”
Nonunion employees will convert to a biweekly payroll if University President Nils Hasselmo approves it, Pfutzenreuter said.
“It’s on his desk right now,” he said, adding that it’s “very likely” that nonunion employees will convert.