Implementation Information

• Scope
• Effects of the Reduction in the Number of Pay Cycles on August 13, 2007
• Distributing Academic Pay Over 12 Months
• Flexible Year Program
• Employment Transitions
• Increased Hourly Pay Rate and Potential Higher Income Tax Bracket
• Employee Benefits Deductions
• Medical, Dental, Vision, and Life Insurance Benefit Deductions
• Short-Term Disability Insurance Benefit Deductions
• Flexible Spending Account(s) Deductions
• Tax Sheltered Annuity 403(b) and/or Deferred Compensation 457 Plans
• Change in Annual Leave Accrual Rate
• Change in Sick Leave Accrual Rate
• Retirement Eligibility for Single Semester Appointments
• Graduate Assistants/Associates and FICA Exemption
• Supplemental Compensation
• Purchasing University Services Using Payroll Deduction
• Pre-Authorized Personal Banking/Credit Union Account Deposits
• Personnel Services Operating System (PSOS) Modifications
• Contacts

 

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Scope

The University currently employs almost 4,000 individuals who are paid on a ten-month academic cycle. This includes nearly 1,300 faculty, fewer than fifty non-faculty appointed personnel, more than 2,500 academic graduate assistant/associates, and fewer than thirty-five academic-year classified staff. The 10-month academic year contains 22 pay cycles; effective August 13, 2007, the 9-month academic year will contain 20 pay cycles.

 

Effects of the Reduction in the Number of Pay Cycles on August 13, 2007

The reduced number of pay cycles affects many business operations of interest to academic employees and their business offices, ranging from employment contracts and income taxes to benefits deductions and paid leave accrual rates. This web site contains a summary of these changes, with links to applicable policies and related web pages where available.

 

Distributing Academic Pay Over 12 Months

The existing 10/12 pay arrangement used by eligible academic employees to distribute their pay evenly over 12 months will change to a 9/12 pay arrangement for the 2007-2008 fiscal year.

 

Flexible Year Program

In the past, some classified staff and appointed professionals have enrolled in the Flexible Year Program. This program is a staffing alternative that allows departments the flexibility to meet operational and staffing needs during peak load periods, and at the same time, allowing for a cost savings in staffing and personnel services during the off-peak periods. This program will be unaffected by the change in the number of academic pay periods.

 

Employment Transitions

Academic faculty and graduate assistants/associates will automatically transition to the new nine-month academic year. It is projected that many will experience a reduction in conflicts with supplemental compensation funded by sponsored projects.

Most non-faculty appointed personnel and classified staff who work an academic year will transition to the new nine-month academic year. Some departments may decide to transition these employees to fiscal year employment in conjunction with the use of Flexible Year employment arrangement.

 

Increased Hourly Pay Rate and Potential Higher Income Tax Bracket

Hourly pay rates in the payroll system will increase; total funding and annualized pay for each position will remain unchanged. The increase in the gross amount of each paycheck could place the employee in a higher tax bracket. Affected employees may want to review the tax implications and consider reducing their income tax withholding by a) modifying the W-4 and/or A-4 withholding election(s) by logging-on to the UAccess Employee self-service system or b) enrolling in a tax-qualified supplemental voluntary retirement program (Tax Sheltered Annuity 403(b) or Deferred Compensation 457 plans).

 

Employee Benefits Deductions

Employees who have enrolled in employee benefits through payroll deduction will notice a slight increase in the amount deducted from each paycheck, due to the fewer pay periods in the academic year.

 

Medical, Dental, Vision, and Life Insurance Benefit Deductions

Academic employees have extra insurance premiums deducted from their biweekly pay to cover premiums during the summer when no salary is received. As the transition in pay dates occurs in the summer of 2007, academic year faculty and staff will be short one extra premium payment. On a one-time basis, there will be a special benefit premium deduction from the "third paycheck" on March 30, 2007, a pay period in which there are traditionally no deductions taken. This will ensure continuous benefit coverage as we transition to 20 pay periods a year.

 

Short-Term Disability Insurance Benefit Deductions

There will be no change to the short-term disability insurance benefit premiums.

 

Flexible Spending Account(s) Deductions

As the transition in pay dates occurs in the summer of 2007, academic employees who participate in the FSA Spending Account(s) will be shorted by one full pay period contribution. To ensure that the fully elected amount for calendar year 2007 is contributed, the third paycheck in March 2007 traditionally referred to as a "third paycheck / benefit premium holiday" will be used to take a one-time full contribution deduction.

 

Tax Sheltered Annuity 403(b) and/or Deferred Compensation 457 Plans

Participants in the Tax Sheltered Annuity 403(b) and/or Deferred Compensation 457 plans will use nineteen (19) academic pay periods for salary deferral in calendar year 2007. Visit the Supplemental Retirement Plan web page on the Human Resources web site for contact information and forms.

 

Change in Annual Leave Accrual Rate

Benefits-eligible academic employees (administrators, non-faculty appointed personnel and classified staff) remain eligible to receive paid annual leave in accordance with existing policy. Refer to University Handbook for Appointed Personnel Policy 8.01.01C Annual Leave, Academic Year Appointees or Classified Staff Human Resources Policy 200.00, Vacation.

 

Change in Sick Leave Accrual Rate

Benefits-eligible academic faculty, administrators, and non-faculty appointed personnel will continue to earn nine days of sick leave per academic year and will notice a slight increase to the sick leave accrual rate in each paycheck. University Handbook for Appointed Personnel Policy 8.02.01A Sick Leave.

Benefits-eligible academic classified staff will continue to earn eight hours of sick leave for each month of full-time employment. Classified Staff Human Resources Policy 201.0, Sick Leave.

 

Retirement Eligibility for Single Semester Appointments

Arizona statute defines employment that is eligible for retirement plan participation. An individual employed for at least 20 hours per week for at least 20 weeks in the fiscal year is eligible for and required to participate in a retirement plan. The 2007-2008 academic will have 20 weeks in each semester, and an employee whose appointment is at least one full semester will continue to be eligible for and required to participate in a retirement plan.

 

Graduate Assistants/Associates and FICA Exemption

In accordance with IRS regulations, graduate assistants/associates are exempt from deductions for Social Security taxes (FICA) during semesters or summer sessions only when officially enrolled in classes. Minimum enrollment for the exemption is six (6) units per semester for Fall/Spring or three (3) units per summer session.

 

Supplemental Compensation

Supplemental compensation remains available as the payment vehicle for work performed outside the 9-month academic year. In accordance with OMB Circular A-21, "Cost Principles for Educational Institutions" an individual may not earn supplemental compensation and regular compensation concurrently. In order to eliminate the overlap between the academic year and the summer months, two changes to current administrative practice are being made.

1. The maximum number of supplemental compensation hours that may be earned by an academic employee has been reduced from 497 to 464.
2. An adjustment to the academic salary conversion factor from .00067 to .00072, with a corresponding increase in the supplemental compensation hourly rate.

The net effect of these changes in administrative practice is that an eligible individual may earn slightly more supplemental compensation each academic year.

	Current	Effective 2007-2008 Academic Year
Maximum Supplemental Compensation Hours	497	464
Conversion Factor	.00067	.00072
	Sample Calculations
Academic Salary	$100,000	$100,000
Supplemental Compensation Hourly Pay Rate	$67 per hour	$72 per hour
Maximum Supplemental Compensation Earnings	$33,299	$33,408

More information is available on the Systems Control and Sponsored Projects web sites and in the following policy manuals.

University Handbook for Appointed Personnel Policy 2.06.07, Supplemental Work for The University
Graduate Assistant/Associate Hiring Manual Chapter 5, Additional On-Campus Employment
Classified Staff Human Resources Policy 316.0, Supplemental Compensation

 

Purchasing University Services Using Payroll Deduction

Academic employees who purchase campus services through payroll deduction, such as parking permits or campus recreation membership, will notice a slight increase in the amount deducted from each paycheck. For further information, contact the department that provides the service.

Parking and Transportation Services
Campus Recreation

 

Pre-Authorized Personal Banking/Credit Union Account Deposits

Affected employees with pre-authorized personal banking or credit union account deposits (i.e., mortgage or insurance payments) should contact their financial institutions to assess whether these pre-authorized payments are affected by the new number of paychecks in the academic year, effective August 13, 2007.

 

Personnel Services Operating System (PSOS) Modifications

PSOS functions will undergo several modifications, including the salary modeling screen, parameter tables, payroll audit reports, academic benefit accruals ratio, recalculations for wage assignments, tax levies and garnishments, and revised "help" links. These modified functions will be available by May 2007 to authorized PSOS users.

 

 

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Contacts

Human Resources	Human Resources Information and Benefits Assistance	520.621.3662	email
Financial Services Office - Operations, Payroll	Jenny Ruiz	520.626.2830	email
Systems Control	Priscilla Cantu	520.621.7722	email
Sponsored Projects	Sherry Esham	520.626.6309	email
	Paul Sandoval	520.626.6311	email
Parking and Transportation Services	Customer Relations	520.626.7275	email
Graduate College	Julie Treanor	520.621.5193	email
	Judy Goosherst	520.621.7785	email
Campus Recreation	Nellie Lujan	520.626.3396	email
	Brenda Hettinger	520.626.3396	email

 

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