Archived: Government of Canada update on the Phoenix pay system for January 11, 2017

Thank you for joining us today for our latest update on our progress toward resolving pay issues. My colleagues Alfred Tsang, from the Treasury Board of Canada Secretariat, and Randy Hewlett, from the Canada Revenue Agency (CRA), are with me today to provide updates on the claims process and 2016 tax preparations.

System enhancements

I would like to start today by highlighting the results of some work we have been doing with regard to pay operations. Over the last several months, we have been preparing the system to accommodate upcoming pay events and provide better support to users.

We implemented a technical enhancement in September so that Phoenix could automatically process retroactive payments stemming from new collective bargaining agreements.

Last fall, the CRA signed a new collective agreement, and we have been working closely with the Agency to process the resulting salary adjustments and issue retroactive payments. Today, some 35,000 CRA employees received a first portion of retroactive payments, with the rest to come over the next two pay periods.

In addition, we implemented a series of system updates to reflect new federal, provincial and territorial 2017 tax rate changes that came into effect on January 1 and appear on today’s pay.

I want to remind employees that, at the beginning of each new taxation year, their net pay is usually lower than the last pay at the end of the previous year. This change results from many employees beginning to pay Canada Pension Plan or Québec Pension Plan and Employment Insurance premiums in the new year, which will stop after having reached the maximum level of contributions. So if an employee’s pay has changed, it’s normal as these deductions begin again.

We also took measures to ensure that Phoenix would be able to successfully process 2017 charitable campaign payroll deductions. Contributions made through electronic pledging were loaded smoothly into Phoenix earlier this month, and employees should see their new contributions deducted as of today. Manual entry of paper-based pledges that had complete information and were received before January 2 will also be reflected in today’s pay. Those received after this date will be processed at a later date. I want to thank public servants who have given so generously this year. Their support of United Way/Centraide year after year allows numerous organizations to continue their important work right here in our communities.

We are also planning a number of future enhancements to further streamline processes, automate transactions and reduce processing times. For example, we are currently working on implementing a retroactive payment function for past acting assignments. Currently, acting assignment transactions that are entered before the end of the acting period are automated; however, if the acting period has passed, the transaction needs to be calculated manually. This enhancement is important because acting assignments represent approximately 25% of our workload. By automating these transactions, we will free up our compensation advisors to focus on processing other transactions more quickly.

Overtime payments have already been automated, and since July, approximately half a million overtime transactions have been automatically processed for 120,000 employees, all without any involvement of Miramichi compensation advisors. This wasn’t the case previously.

Backlog progress

While we seek more opportunities to improve the pay system, we continue to work toward the elimination of our backlog. We have addressed most of the cases involving significant financial or tax implications, such as leave without pay and terminations. Now, the majority of the remaining cases involve transfers of employees moving between departments and acting assignments.

There are approximately 8,000 employees with cases left in the backlog. Many of these employees have multiple transactions, so it’s important to note that 5,000 of 8,000 cases have already had at least one of their pay transactions closed.

We are working hard to close remaining transactions as quickly as we can, but we are dealing with old files that predate Phoenix. This means they take much longer to process than current transactions. Compensation advisors must research employee files, manually calculate amounts owed and input the information into Phoenix. It may take a compensation advisor more than a full day to close a single backlogged file, such as a termination case. In comparison, compensation advisors can process approximately five to seven current termination cases in one day. This is the challenge that we are facing with cases in the backlog but we are working very hard to get through these cases as quickly as possible.

Queue

Given our ongoing work on the backlog, we are not yet able to direct all our resources toward the prompt processing of incoming pay transactions. As I have mentioned before, we are not meeting our established service standards, which are 20 working days for most transactions. Transactions are being processed, but they are not moving as quickly as we would like. To date, we are seeing some improvements in most of our service standards. However, we still have approximately two and a half months of additional work. This situation was expected given our focus on the backlog and the extra work required to prepare for tax season. However, once the backlog is addressed and additional system enhancements are implemented, we expect to speed up our processing times and see a gradual return to our expected service standards.

In the coming weeks, we will post our service standards for specific transactions, such as disability and parental leave.

Tax implications

In December, I spoke about our commitment to addressing issues that may have tax implications for employees. Over the last month, we have been working diligently to address overpayments so that we can minimize their impact on taxes. Anyone who believes they have been overpaid should contact our Call Centre immediately so that we can ensure their case is handled as a priority. Our goal is to prevent all overpayments from appearing on T4s, but, in the event that we are unable to process all these cases before T4s are issued, employees will receive amended T4s.

We heard that employees may have questions about amounts on their pay stubs. Employees have also told us that there weren’t enough details on their pay stubs for them to reconcile amounts received or recovered. As of today, more detailed pay stubs are available. In addition to the details already provided on current pay stubs in Phoenix, the new format provides employees with a breakdown of earning details. So, rather than showing a lump sum, the total amount will show a breakdown of regular, overtime and retroactive pay. It will also provide the corresponding dates related to these amounts, making it easier for employees to confirm pay accuracy.

By mid-February, our plan is to make this detailed information available for all payments received in 2016 so that employees will have all the information they need to verify that their taxable earnings are correct.

In addition, we are ensuring that our Call Centre is fully prepared to help employees with questions related to taxes. Call Centre agents will be able to answer general questions about employees’ T4s. Employees who have more detailed questions will receive a call back from a specialized support group within Public Services and Procurement Canada. If needed, employees will also be connected with experts at the CRA for tax questions. Employees can also access help about taxes directly from the CRA by visiting its website or by contacting its call centre.

Additional support

We know that having trained, experienced advisors at our Pay Centre and in our satellite offices is key to moving toward our steady state. We have 40 trainees who were hired a year ago and will be completing our training program by the end of this month and contributing to Pay Centre operations in Miramichi as full-fledged compensation advisors. In addition, the 90 new trainees hired in October will begin the hands-on part of their training this month. This means that they will be able to provide additional help as we move toward our steady state.

I want to thank the departments and agencies that are helping us to bring in experienced advisors who will continue to support our efforts. We continue to do what is necessary to resolve pay issues as quickly as we can. I would also like to acknowledge the contribution of the unions in helping us resolve employee pay issues.

Conclusion

In closing, I want to thank those employees who have been working hard to process pay and make improvements to Phoenix and associated processes. We are making progress.

Marie Lemay, P.Eng., ing.
Deputy Minister
Public Services and Procurement Canada