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City Council Regular Session
Meeting Date: 01/02/2018  
From: Abigail Donowho

Information
Subject:
Resolution 1746--A Resolution Amending the Employee Handbook of the City of Tillamook
Background:
After the last handbook change to address House Bill 3008, we have come to some roadblocks.  This additional change will alleviate the issues that are set forth below. 
 
The legislative changes in House Bill 3008 require that employees not falsify time cards.  Long-time practice of the City has been to pay for a calendar month, on the last day of the month.  Time cards had been turned in before the end of the month with projected hours noted for the remaining days (not yet worked). 
 
The changes required by HB 3008 do not account all of the effects on processes for implementation.  We initially focused on compliance with non-falsification of timecards and changed the timecard month in the employee handbook to the 23rd-22nd.  Changing time card dates would ensure the employee is not attesting to hours worked that have not yet been worked, keeping payday on the last day of the month.  The impact on employees would have been their first paycheck after the transition--only 22 days (Jan. 1st-Jan. 22nd). This would not have affected the total paid over the course of the calendar year, but the initial transition posed a challenge with fewer days in the pay period, resulting in a smaller check.   While we were prepared to offer staff the ability to cash out some vacation or ETO to have a cushion, the $400 maximum we could offer due to a tight budget would not be much compared to the 5 working days staff was used to not being in the pay period.
 
Working to comply with the new laws regarding time cards, we encountered additional challenges along the way.  The IRS and PERS reporting processes for staff would become long and cumbersome—splitting months requires individual reporting that is just not feasible for our small staff to take on.  The same would have been true for our insurance coverage and other employee-cost related items.  In order to keep our reporting requirements within the parameters set forth by PERS and the IRS, we need to keep our definition of “month” to a standard calendar month.
 
After much thought, the best way for us to comply with the law and keep a standard calendar month is to change the pay date to the 10th following the pay period.  We ran this scenario using the 5th, but unless we see a major streamline of timecards we really need these days to process payroll.  We will have a weekend, and holidays within this time-period several times each year—it will not be something we can push out in 2 days.
 
Changing the due date alleviates the perception of “lost time.”  Each paycheck will include all hours worked during the traditional month—no averaging except for salaried-exempt employees. 

To help with the transition for the end of January and an extra five days until payday, the option to cash out some ETO could still be extended.  That would give each employee a cushion for the additional few days’ wait for the new payday.  This cash out could also extended to exempt employees as the pay date change will affect them as well. 
 
That being said, we anticipate the following as we implement this new process:
  • Oregon law requires wages be paid every 35 days or less.  Although the draw could be considered wages paid within the 35 days, a transition period over the course of about 3 months is recommended for the change.  Moving the pay date and draw date over the course of a couple months would ease the transition for employees.  A 3-5 day movement of dates for the first few months is shown in the attached draft calendar.  With this transition, the dates would be in full-effect by April 2018.
  • Employees will likely have some phone calls to make for automatic withdraws that may be coming from their bank accounts.  Most automatic payments can be set for 15 days either side of their due date.  With the draw moving to the 25th, that is only 5 days prior to the current pay date.  Some staff who don’t take a draw might consider taking one in the future.  Staff could be allowed to make these calls to arrange for alternate dates while at work in an effort to alleviate some stress that may arise.  (A small, but helpful, thing to offer as a lot of our staff work during the hours that these calls will need to be made.)
  • We have been in contact with the union’s representative, and are working with LGPI on additional details for discussion and next steps.  LGPI’s labor attorney and HR representatives have found our interpretation of what the law requires us to do to be correct, and they like our proposed approach with as little inconvenience to employees as possible. 
Recommendation:
Motion:
Attachments
Resolution 1746

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