Biweekly Payroll Could Replace Monthly Pay Stubs

Posted February 27, 2008 at 6:33pm

Attention, House staffers: Balancing that checkbook could soon get a lot easier.

House Administration Chairman Robert Brady (D-Pa.) introduced a bill on Tuesday giving his panel authority to establish a fixed day that House employees receive their paychecks. While that might not seem like a major accomplishment, the legislation’s passage could lead to a monumental first in the House — the creation of a biweekly pay period.

“I think it’s an extremely important piece of legislation, and I’m thrilled that Mr. Brady has introduced it,” said Chief Administrative Officer Dan Beard, the man in charge of getting House employees their paychecks. “It’s going to mean an historic change for House staff.”

Under the current system, staffers receive their paychecks once a month. That undoubtedly requires pretty strict budgeting — something that can be difficult, especially for the many young employees who are near the bottom of the House’s pay scale.

Seven percent of House staffers earned somewhere from $20,000 to $29,999 in 2007, while some 21 percent of House staffers earned $30,000 to $30,999.

About 54 percent of House employees in 2007 were younger than 35 years old; 40 percent are under 30, according to statistics provided by the CAO.

“When you’re in that age group, it’s just so helpful to get paid every two weeks as opposed to every 30 days,” Beard said. “This is really an important first step. People have been talking about this for a long time.”

The bill does not establish a new pay system, but merely gives House Administration the authority to make changes if Members eventually decide they want to do so, according to a statement from Brady’s office.

Transitioning to a new biweekly frequency system would cost $744,000 to $1,116,000 and take 12 to 15 months to complete, according to a January 2008 report by House Inspector General James Cornell. The process could take less time if some tasks are run concurrently, the report reads.

Beard said he expects the project to cost about $1 million and take several months.

“It’s going to be a challenge to figure out the smoothest way to make the transition,” Beard said, adding that much of the prep work already is under way.

“This has been rattling around in a serious way for at least a couple of years, so we’ve already expended a considerable amount of brainpower to the effort,” he said.

Aside from easing the monthly money worries for many House staffers, a biweekly pay period also would be beneficial to the chamber, according to the IG report.

Under the current system, the House pays its 10,000 employees in real-time — that is, the pay date is on or earlier than the pay period ends.

But best business practices recommend implementing a pay lag — meaning a pay period would end about a week before an employee actually gets paid — in order to permit payroll transactions to be submitted on a more consistent schedule, something that also could potentially reduce the number of overpayments.

House Administration ranking member Vernon Ehlers (R-Mich.) is concerned about how the transition to a new system would play out — and whether the period during which a pay lag is instituted will wreak havoc on staffers’ bottom lines, according to spokeswoman Salley Collins.

If the new pay system goes into effect at the start of the month, for example, staffers would get their first check two weeks later. But they would only get one week’s worth of money — with the other week used to create the lag.

“While we realize that there are obvious benefits to changing the pay cycle, we also know that there are significant costs and inconveniences for staff,” Collins said.

The exact time of the lag, or whether a lag will be implemented at all, remains up to the committee, however. In its report, the IG wrote that officials “should consider an option that provides the best balance of transactional processing time with a reasonable lag period.”

But there are several employee advantages for the new system, according to the IG report. New hires could potentially receive their paycheck sooner, pay raises could go into effect more quickly, and overtime would be paid in the current cycle rather than the next month. New employees also could start receiving benefits sooner.

Beard predicted that if a new system is implemented, money would be saved in the long term. The CAO currently closes its books on the 15th of the month, he said.

So, if an office hires someone on the 16th, the CAO needs to do a supplemental payroll and a second run, usually done between the first and 10th of the month.

“We’ve got a really complicated system,” Beard said.