Archived: Government of Canada update on the Phoenix pay system for February 8, 2017

Good morning, everyone, and thank you for joining us for our regular update on Phoenix.

Overpayments

I would like to begin by addressing the recent media reports on overpayments.

As I have mentioned before, we are not promptly processing pay transactions, and this means that many employees who have left the public service or changed jobs continue to receive pay that should have been stopped.

This being said, all overpayments will be recovered once we process these outstanding transactions. When we do complete an overpayment case, we contact employees to ensure they are aware of the situation and provide options for repayment to minimize financial burden.

It is important to note that overpayments were also experienced with the old system. For example, in 2015 (pre-Phoenix), we recorded more than $78 million in overpayments. Over time, this is a situation that should appear less and less frequently because we now have a system that flags any payment over $10,000 so that departments and agencies can validate these amounts before payments are made.

Our priority remains ensuring employees receive their pay accurately and in a timely fashion.

Tax implications

As for taxes, next week, employees will start having access to their tax slips, so I want to begin by outlining the five steps employees should take to prepare their tax returns.

The first thing to do is obtain the T4 or Relevé 1 slip, available the week of February 13 through Phoenix. Second, employees should consult their final 2016 paystub, available through the Compensation Web Applications website. This information will provide totals of all payments received in 2016. Third, employees should compare these two documents to verify that the earnings listed on the paystub match those on the tax slip. Information on how to do this and what to look for will be posted on our website next week.

If these documents align, employees can proceed to file their tax returns as usual.

If, however, there is an issue with earnings listed on paystubs or tax slips, the fourth step is to consult our online questions and answers, which provide information on a range of tax scenarios. I am also pleased to say that we have developed a comprehensive guide for 2016 tax season in collaboration with the unions, the Treasury Board Secretariat of Canada and the Canada Revenue Agency It will be available on our website shortly.

Finally, as a fifth step, employees who still have questions about their earnings or taxes should contact our Call Centre. Employees who are not serviced by the Pay Centre should call their departments first, but if they do contact our Call Centre, our agents will transfer them directly to their department’s compensation units, which can answer their questions.

Our Call Centre agents have been specially trained to help employees understand paystub information and tax slips. Employees who have more detailed questions about their earnings will be connected to a specialized support group within Public Services and Procurement Canada. If needed, employees will also be connected with experts at the Canada Revenue Agency (CRA) for questions related specifically to taxes.

I want to walk through the two big tax-related issues that employees may encounter: overpayments and underpayments. My colleagues from the CRA and the Treasury Board of Canada Secretariat (TBS) will provide more detailed information as well.

Let me begin with overpayments. You will remember that, in the fall, we reached out to employees and asked those who had received an overpayment, and wanted to avoid this amount showing on their 2016 tax slips, to contact our Call Centre before December 31. Almost all employees who contacted us will not have an overpayment showing on their 2016 tax slips, whether the full amount was repaid or not.

There were a small number of complex overpayments that could not be processed before December 31. For these, and for employees who did not contact us, overpayments may appear on the tax slips. In this situation, employees should still file their taxes as they normally would, but they should contact us if they haven’t done so already. We will then issue an amended tax slip with the overpayment corrected. Any employees who receive an amended tax slip after they have filed their taxes will not have to refile their tax return. We will provide the corrected earnings information to the CRA, which will adjust the tax return. Employees who receive an amended tax slip before they have filed should use the amended slip for their tax return.

For underpayments, any money owed for 2016 that is received in 2017 must be reported on 2017 tax returns. This means that someone could pay lower income taxes than usual in 2016 and higher income taxes in 2017. If this affects taxes or eligibility for government benefits after 2017, such as child care, employees can submit a claim under the claims process. Each claim will be reviewed based on valid receipts and other supporting documentation. Through these measures, employees will be well supported to file their tax returns. We will closely monitor the situation and take additional steps if employees are not getting the assistance they need.

Our plan moving forward

Switching now from taxes to pay, our priority moving forward is prompt processing and short wait times. Too many employees are waiting too long for their payments. Our goal is to reach a steady state where service standards are met 95% of the time. We are executing a three-part plan to get us there that consists of more capacity, increased efficiency and greater transparency.

More capacity

We have begun shifting compensation advisors to incoming transactions as we are nearing the end of the backlog. What’s more, we are concentrating our resources toward specific areas so we can systematically reach and maintain steady state one transaction type at a time. Working with our union partners, we identified parental and disability leave cases as key priorities. We are focusing on these transactions first, and we will bring them to steady state by the end of March for parental leave, and by the end of April for disability leave. This means any employees currently waiting for parental or disability leave will have their cases resolved by this time. As well, 95% of transactions submitted as of April for parental leave, and as of May for disability leave, will be processed within 20 working days, which is our established service standard. Once we achieve steady state in these areas, we’ll shift our focus to other categories until we’ve reached steady state across the board.

Increased efficiency

In addition to having more people working on specific transactions, calculations for acting payments will soon be automated, which will reduce our workload and processing time. Also, in the coming weeks, departments and agencies will begin entering key information into Phoenix for new hires, students and employees returning from leave. This will reduce work for Pay Centre staff and, more importantly, prevent a range of pay issues.

Another big efficiency gain will come from an integration initiative. When Phoenix was planned and implemented, there was not enough attention placed on the processes and practices that people would use to interact with it.

We focused on the technology working, not on working with the technology.

As I mentioned at the last tech brief, we are seeing the benefits of system automation for certain kinds of transactions. Before Phoenix, wait times for overtime pay varied widely, and employees could wait months before being paid. Now, as soon as most overtime transactions are entered by employees and approved, they appear on their next pay. They no longer come to the Pay Centre for processing.

Without question, we need to continue to improve the processing of pay transactions within the Pay Centre. However, when we look at root causes of pay issues, it is clear that we also need to adjust the way we work outside of the Pay Centre. Specifically, we need to look at the end-to-end process.

We will be conducting an expert third-party assessment to identify the processes, behaviours and practices that can be adjusted or changed to avoid pay delays and increase processing efficiency. Our objective is to ensure that all parts of the pay system are working together optimally from end to end so that employees get their accurate pay on time, every time.

To help me with this, Mr. Neil Yeates joined my team as a senior advisor. He will work with departments and agencies to help them adopt adjusted work processes and practices.

Greater transparency

The final component of our plan is transparency. Today, we posted our first monthly public service pay dashboard. This information shows employees how we are doing against our service standards and provides estimated wait times for various transactions. As I noted, we’re tackling our service standards category by category. Therefore, on a monthly basis, employees will see improvements. I know some of the estimated processing timelines will frustrate employees, especially those who have already waited many months for their pay. We are working hard, and wherever possible, we will accelerate these timelines. I remind all employees that emergency salary advances and priority payments are available for anyone facing financial hardship, so there is no reason for employees to go without their pay.

As important as it is for us to be transparent, we also want to make sure we provide employees with reliable, useful information. We see this dashboard as a reporting tool that will evolve over time, and we look forward to getting employee feedback and making improvements.

Conclusion

I would like to conclude by telling employees that over the next few weeks, you will begin to see change and you will start to feel improvements. There is still much to do, but we are picking up momentum.

Thank you all for your continued patience.

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