Members of the Financial Management Committee once again visited the idea of “lagging” payroll for county employees during their meeting on Wednesday.
During the April meeting of the Committee, members voted to send a plan to lag the payroll for employees to the full Commission for a vote, but that plan is now on hold following a vote by the committee to revisit the issue before making a recommendation to the Commission.
According to County Finance Director Ingrid Deloach, the majority of the county’s employees are not on a lagged pay system. Deloach stated that payroll is processed on Tuesdays with the employees receiving pay every other Friday. Because the payroll system is not lagged, Deloach said it creates the potential for a problem because employees are turning in time sheets to payroll which list days they have not yet worked because the time sheets must be turned in prior to the end of the payroll cycle so that payroll can be processed.
Deloach said that problems could arise if an emergency happens and an employee must take a Wednesday or Thursday off after they have already turned in their time sheet. This creates problems in reconciling their pay with the hours which were actually worked, she said.
“A lagged payroll system is just a good sound accounting practice,” Deloach said.
The proposal would be to implement the lag by lagging each payroll for one day for five consecutive payrolls which would result in payrolls being lagged by one work-week total.
Following last month’s meeting where the idea to moved to a lagged system was approved, Deloach contacted the heads of the various county offices to determine the response to the proposal. Deloach presented those responses to the committee on Wednesday.
Deloach stated that there were mixed feelings by the proposal with some overwhelmingly opposed to the idea. She said that while some offices reported that employees would support a lag if it was done with the five pay period plan, others were very adamant and vocal against the idea. She said some employees voiced concerns that lagging payroll would affect their personal finances in regard to previously scheduled payments and account auto-drafts.
Those concerns were echoed by some members of the committee.
“Some of our county employees, and I am ashamed to say this as a commissioner, they make $19,000 – $23,000 a year,” said County Commission Chairman Tom “Yogi” Bowers. “They are pretty much living paycheck to paycheck.” Bowers stated that it was his fear that lagging the payroll system for existing employees would create financial hardships for those employees as they attempt to adjust to the new pay schedule.
Deloach responded by stating “our lowest paid employees are already lagged,” adding that the landfill employees are currently the only county employees on a lagged payroll system.
Bowers then asked about the possibility of implementing a lagged system for new employees and allowing the payroll system to change over slowly.
“That would be an accounting nightmare,” Deloach said. “You would be running two payrolls.” She stated that placing new hires on a lagged system would create confusion when an employee resigned, retired or was terminated because Finance Department employees would have to try to determine if the person was on a lagged payroll system or not in order to determine the correct amount of pay for the employee upon their departure.
Deloach also addressed rumors which have been circulating regarding the committee’s decision to recommend lagged payroll.
“We are not cutting anyone’s pay,” she said. “They will just be getting their pay a week later. This is also not a way to give someone a hidden bonus or attempt to balance the budget.”
Following Deloach’s report on the response to proposal by the county offices, Bowers made a motion to reconsider the lagged payroll issue. The motion was seconded by committee member Russell Kyte and passed on a vote.
Once the proposal was formally up for reconsideration the committee discussed the need to further investigate the matter before sending it to the full Commission for a vote.
“I am not going to ask for a vote on this today,” said Committee Chairperson JoAnn Blankenship, adding that it was her belief that the proposal needed to be discussed with the Budget Committee and that the Financial Management committee would also see a legal opinion on the implementation of the plan and any legal issues it might present.
The Committee submitted a lagged pay request to the Commission in May 2012 but the proposal failed to pass on a vote.