Payment in Arrears - Questions and Answers

Question3 - Answer 3:

By implementing industry standard payroll practices, the Government of Canada will improve pay services to employees through timelier processing of changes in their pay, increased transparency and predictability in earnings reduction in the number of adjustments to employee’s pay on subsequent payments and a decrease in overpayments (that would need to be recovered from employees).

Question4 - Answer 4:

Moving to payment in arrears will ensure consistent, timely and efficient pay services. It will significantly reduce overpayments and will increase the accuracy of payments reducing hardship on employees from having to pay back the amount of salary dollars they were overpaid.

Question5 - Answer 5:

The Government will officially implement payment in arrears in April 2014.

Question6 - Answer 6:

All new employees not on the payroll on April 23, 2014 will be automatically placed on payment in arrears; they will receive their first payment, within four weeks from their start date. They will receive their final payment, at the latest, two weeks following departure. Employees hired on or after this date will not receive the transition payment as they will be put on payment in arrears when they are hired and they will not be impacted by the transition to payment in arrears.

Question7 - Answer 7:

Existing employees will continue to be paid every two weeks.

Question8 - Answer 8:

Existing employees will continue to be paid their "regular" salary every two weeks. When payment in arrears is implemented (end of April 2014), Public Works and Government Services Canada (PWGSC) will make a one-time transition payment(May 21, 2014) to existing employees and from that point forward employees’ salary statements will indicate the period ending two weeks prior to the date the payment is received. Unlike new employees, existing employees will not have to wait four weeks to receive a salary payment when the transition to payment in arrears occurs (end of April 2014). Existing employees will continue to receive a salary payment every two weeks, therefore, they will not be entitled to a "regular" salary payment two weeks after they depart from the public service. Instead, a final payment will be made to cover the difference between their current salary at departure and the transition payment which was issued in May 2014.

Question9 - Answer 9:

It would not be cost-effective to limit payment in arrears to new employees. The Government of Canada wants to modernize and improve pay services for all employees, therefore, payment in arrears will be the standard for all employees.

Question10 - Answer 10:

A departure for the purposes of this initiative will be defined as a resignation; retirement; end of specified term; termination of employment; dismissal; rejection during probation; layoff or death. (Note that a change in employer from TB to a separate agency or vice versa does not constitute a departure for the purposes of payment in arrears.) Upon departure, the final payment will be based on the difference between the transition payment made in May 2014 and the final salary payment.

Question11 - Answer 11:

The transition payment is a one-time salary payment that will be paid to all public servants that are paid every two weeks on a "current" basis. This includes indeterminate, term, seasonal employees and those casuals and students not currently paid in arrears (varies by department/agency), regardless of group/level, employer (core public administration or separate employer) and union affiliation. The transition payment is being made to avoid any financial hardship to employees as the Government transitions to payment in arrears. This one-time payment will be in the same amount as the "regular" pay (i.e. basic pay) received May 7, 2014.

The following standard deductions will be taken from the payment:

• Income Tax (Federal and Provincial)
• Canada Pension Plan/Quebec Pension Plan
• Employment Insurance/Quebec Parental Insurance Plan
• Pension Plan contributions
• Disability Insurance/Long-term Disability Insurance
• Supplementary Death Benefit

Other deductions, such as union dues, Canada Savings Bonds, Public Service Health Care Plan, Public Service Management Insurance Plan, Government of Canada Workplace Charitable Campaign etc., will be taken from the payment (if the deduction applies to the employee).

Question12 - Answer 12:

No, payment in arrears will have no impact on the five consecutive years of highest paid service for pension purposes.

Question13 - Answer 13:

No. All employees paid on a bi-weekly "current" basis will receive the transition payment.

Question14 - Answer 14:

No.

Question15 - Answer 15:

The one-time transition payment will be made in the same manner as the employee’s regular pay.

Question16 - Answer 16:

There is no change to the current policy on emergency salary advance.

Question17 - Answer 17:

In very rare cases, employees may earn less salary when they leave the public service than when the transition payment was issued in May 2014. For example, employees may work part-time prior to their departure, and therefore, may owe money to the Government. In these cases, the money will be taken from first available funds including the last salary payment, overtime, etc. or their pension (if they will receive a pension). Otherwise, employees must provide a money order or certified cheque payable to the Receiver General for Canada.

Question18 - Answer 18:

Employees will continue to be paid their "regular" salary (i.e. basic pay) every two weeks. Two weeks after they leave the public service, they will receive a final payment covering any salary increase since the transition payment was received in May 2014.

Question19 - Answer 19:

Let’s assume the employee retires on June 4, 2014, two weeks after receiving the transition payment on May 21. Assuming the employee’s salary remains the same, a final payment two weeks after departure will not be received as the employee will have received the full amount of salary for the period of time worked.

Question20 - Answer 20:

With the transition to payment in arrears occurring the end of April 2014, normally, the salary change will be reflected on the regular pay of June 4, 2014 and a supplementary payment, if applicable, will be received shortly thereafter for any salary owed for the period up to and including May 7, 2014.

Question21 - Answer 21:

The employee will receive one transition payment only, which will cover the "regular" salary (i.e. basic pay) for both positions.

Question22 - Answer 22:

The employee will receive two transition payments – one from each department to cover the "regular" salary (i.e. basic pay) in each of the positions.

Question23 - Answer 23:

The employee will receive the transition payment in the amount of the reduced salary based on the approved leave with income averaging or pre-retirement agreement.

Question24 - Answer 24:

If the employee is paid by the Government of Canada during the interchange, which started prior to the transition to payment in arrears (April 2014), the employee will receive a transition payment.

Question25 - Answer 25:

Employees will receive the same income they would have received if payment in arrears was not implemented. All money earned and all deductions taken during the 2014 calendar year will be reported on their 2014 tax slips.

Question26 - Answer 26:

All money that was earned and all deductions taken during the applicable calendar year will be reported on the tax slips for that applicable calendar year.

Question27 - Answer 27:

The revised rates will be on the regular pay of July 15 covering the period June 18 to July 1, 2015.

Question28 - Answer 28:

Changes in salary that come in effect between April 24, 2014 and May 7, 2014 will not be reflected on the transition payment paid on May 21, 2014. The transition payment will be based on the employee’s salary prior to the increase on May 1, 2014. The salary increase will be included in the employee’s regular pay of June 4, 2014, and shortly thereafter a supplementary payment will be received covering the retroactive period May 1 to May 7, 2014.

Question29 - Answer 29:

There are no plans to move to semi-monthly pay.

Question30 - Answer 30:

The following employees will not be impacted by the transition to payment in arrears and will not receive the transition payment:

• Employees currently paid once a month;
• Employees currently paid in arrears:
  • who currently submit "time sheets" to cover the hours/days worked
  • others, for example, casuals (those employed for 90 days or less in a calendar year) and students often.
• Those employees who are paid monthly but receive an interim payment in the middle of the month (e.g. teachers);

Question31 - Answer 31:

Employees will receive an official notification of the transition payment, which will occur in May 2014.

Question32 - Answer 32:

Employees will receive the transition payment if they are on any type of leave without pay (maternity/paternity; educational leave; off-season periods or disability leave) however, this payment will be received shortly after their return to work from their leave without pay. Two weeks after they leave the public service, a final payment will be made to cover the difference between their current salary at departure and the transition payment which was received shortly after they return to work.

Question33 - Answer 33:

No, employees will not get a regular pay on May 21, 2014. Instead, they will receive a one-time transition payment that will be in the same amount as their regular pay.