Duquesne University’s Payroll Transition:

1. Duquesne University’s Payroll Transition: Salary Entitlement to Payment in Arrears

2. Meeting Agenda • Overview of what’s changing and who’s affected • Summary of the current payroll process, Salary Entitlement • Explain how this transition affects you • Action steps for a smooth transition the new payroll process, Payment in Arrears • Q&A

3. What is changing about the payroll process? • Effective July 1, 2012, Duquesne will convert its payroll system for salaried employees to the system known as “payment in arrears.” • Payment in arrears describes a system in which work is performed first, and then payment for the work is made. • The new payment in arrears process will pay employees for time worked, with a one-week processing time between your pay period and the date you receive your pay. • *Hourly employees are already paid in arrears.

4. Who is Affected? • This change applies to: • 12-month full and part-time administrative employees • 12-month faculty • 12-month department chairs with a July through June appointment • Graduate assistants with a July through June appointment in FY 2013 who receive a stipend. • Approximately 840 employees • Hourly employees are already paid in arrears.

5. Why Change to a New System? • Processing payroll under payment in arrears will clarify the pay process for all employees. • All salaried and hourly employees will be paid through the same process. • Manual calculations will no longer be required to process salaried employees’ pay. • Payment in arrears is the most common method of processing and distributing payroll and will allow University employees to fully utilize the Banner system.

6. Current Pay Process • The current process divides an employee’s salary equally over the course of a fiscal year based upon the number of pay periods in that year • For example, in the current fiscal year, FY 2012, the pays are 1/27 of an annual salary

7. Current Pay Process • Pays can include salary ahead of time worked, depending on the pay schedule. • Last year, the last pay date in the fiscal year was June 17, 2011, but the pay included salary until June 30, even though employees hadn’t already worked the rest of the month. • FY 2012 has 27 pay dates, the first of which was July 1, 2011. On that first pay date, salaried employees received 1/27 of their salary for the upcoming fiscal year even though they had not yet worked in that fiscal year. • If an employee leaves the University, this system of paying ahead of time can result in the employee having to pay money back to the University, depending on the pay cycle.

8. First Pay • Jane Duquesne’s first pay included her bi-weekly pay of $1,692.31 plus a one-time salary entitlement pay of $2,030.49 • Total first pay = $3,722.80

9. Final Pay • Joe Duquesne was anticipating a final pay of $7,255.30 • He only received $4,290.19 due to the salary entitlement reconciliation • Final pay was $2,965.11 less than anticipated

10. Current Process: Divides an employee’s salary equally over the course of a fiscal year based upon the number of pays in that year. March 9 23 May 4 18 July 1 15 29 January 13 27 September 9 23 November 4 18 FY 2013 Nov. Feb. Apr. May July 2012 Aug. Sept. Oct. Dec. Jan. Mar. Jun. December 2 16 30 August 12 26 April 6 20 February 10 24 October 7 21 June 1 15 29 In the current fiscal year, FY 2012, the pays are 1/27 of an annual salary

11. Payment in Arrears • Payment in arrears represents a change from the current process. • It’s a system in which work is performed first, and then payment for the work is made. • Moving forward, you will be paid for time worked, with a one-week processing period between the days/weeks for which you are being paid and the date you receive the pay.

12. How Does this Change Affect Me? • Your July 13, 2012 pay will be impacted • The 27th and final pay for this fiscal year (July 1, 2011-June 30, 2012) will be June 29, 2012, and includes salary earned through June 30. This payment reconciles all salary you earned during FY 2012.

13. How Does this Change Affect Me? • You will already have been paid for the last week of June on June 29, 2012. • The July 13, 2012 pay will include compensation for only the first week of July.

14. Future Pay Period & Pay Dates • After the July 13 pay, pays will include payment for any time earned during the prior two week period. • There will be a one-week processing period between the days/ weeks for which you are being paid and the date you receive the pay.

15. Future Pay Period & Pay Dates Pay PeriodPay Date July 2 – 8, 2012 July 13, 2012 July 9—July 22, 2012 July 27, 2012 July 23—August 5, 2012 August 10, 2012 August 6—August 19, 2012 August 24, 2012

16. Transition to Payment in Arrears • Transitioning at the beginning of FY 2013 had the least amount of impact on employees. • To make this transition to payment in arrears as smooth as possible the University is offering a pay advance.

17. Action Steps • You must request or decline this advance during Benefits Open Enrollment. • April 9 – May 21, 2012

18. Option #1: Advance • If you request the one-time pay advance: • The advance is not earned salary and does not represent pay for time worked. • Generally, the amount of the advance will equal one half of your FY 2012 bi-weekly pay multiplied by a factor of 75%. This amount approximates one week of net take home pay. • An estimate of your advance will be available via the online benefits enrollment portal, Benefficiency.

19. Option #1: Advance • Since the advance is not earned salary, it is not subject to taxes or retirement contributions. •  If you separate from employment with the University before the advance is repaid, the balance will be deducted from your final paycheck.

20. Options #2: No Advance/One Week Pay • If you decline an advance, your July 13, 2012 pay will include one week of salary. • Employees who decline the advance must consider that all regular bi-weekly deductions will be taken from this pay. • You need to consider the impact a one week pay will have on any automatic payments and transfers.

21. Request or Decline an Advance • Full-time salaried employees: • You must select an option in the online benefit enrollment system, Benefficiency. • If you do not request or decline this advance, you will be automatically defaulted to the “decline” option. • If you are a department chair and request an advance, the advance will be calculated on your base salary only, not the stipend you receive for your chair role.

22. Request or Decline an Advance • Part-time salaried employees: • You will receive a document which must be completed, signed and returned to the Office of Human Resource Management by May 21, 2012. • Graduate Assistants • Annual appointment letters will include instructions and a deadline for requesting or declining the advance.

23. How do I repay the advance? • The advance will be paid back through a payroll deduction beginning July 13, 2012. • All Salaried Full and Part-Time Employees • Option 1: 26 equal installments beginning July 13, 2012. • Option 2: 52 equal installments beginning July 13, 2012. • Graduate Assistants • 26 equal installments beginning July 13, 2012.

24. Example: $44,000/Annual Salary 

25. Things to Consider • The deadline to request or decline the advanceis May 21, 2012, the same deadline as Benefits Open Enrollment. • You need to consider your personal situation • regular monthly expenses, deductions, auto payments, split deposits, billing cycle for personal expenses, etc. • If you decline the advance, you may also need to consider making a one-time adjustment to your direct deposit allocations.

26. Direct Deposit Allocations 

27. Things to Consider • All taxes tied to earned income will be based on one regularly scheduled week of pay. • Benefits and all other deductions that are not tied to earned income will be deducted as if you were receiving a pay for two weeks.

28. Example: $44,000/Annual Salary 

29. Stay Connected • DORI- www.duq.edu/paytransition • FAQs • Email reminders • Letter sent to your home • Full-time employees can view estimates of your advance through Benefficiency and your one week pay in Self Service. • Schedule a one-on-one meeting

30. Questions? • Contact the Controller’s Office: • 412.396.6592 • paytransition@duq.edu