Hourly Paid Salary Transition

What is ‘hourly paid salary’ and what does it mean?

Employers are allowed to pay non-exempt staff (those eligible for overtime/compensatory time) on an ‘hourly’ or an ‘hourly paid salary’ basis. Both designations require that employers pay overtime pay (or compensatory time in the public sector) at a rate of one and one-half their regular rate of pay for hours worked exceeding 40 hours. At UNI, non-exempt staff who work year round and have a regular schedule that doesn’t often vary have been historically designated as ‘hourly paid salary’. These staff receive a salary each month based on their hourly rate of pay times their scheduled hours.

For Merit staff, this has been calculated by multiplying the number of work hours in the calendar year by the staff member’s hourly rate of pay, then dividing that by twelve monthly pay periods. View the Annual Standard Hours supporting web page to see the standard number of hours for the past several years.

For P&S non-exempt staff, their salary has been based on their hourly rate of pay times 2087 hours. Through weekly timecard entry, if approved timecards are received with overtime or ‘off duty’ time, corrections to the salary are completed by Payroll.

What is changing for staff currently designated as ‘hourly paid salary’?

Effective Sunday, October 1, 2023, non-exempt staff currently designated as ‘hourly paid salary’ will be moved to ‘hourly’. These staff will continue to be paid their same hourly rate of pay, but will be paid based on processed timecard hours rather than assuming the salary and then making corrections as necessary.

How do I know if I am currently ‘hourly paid salary’ and if this change will impact me?

If you are currently ‘hourly paid salary’, you would see “hourly salary” in the Hours and Earnings section of your most recent pay stub.

Will my pay period stay the same and will I still be paid on the same frequency?

Staff changing from ‘hourly paid salary’ to ‘hourly’ will continue to receive their pay on the last working day of each month. However, the pay period will change based on timecard submission timelines prior to payroll processing each month. The pay period for ‘hourly paid salary’ is the first day of the month to the last day of the month. The pay period for ‘hourly’ is slightly different each month but approximates the middle of a month to the middle of the next month. This allows time for timecards to be submitted, approved and processed prior to that month’s payroll.

Will the change in the pay period described in Q4 cause a delay in my pay during the transition?

Staff designated as ‘hourly paid salary’ are paid on the last working day of the month and include pay for that entire month. Staff designated as ‘hourly’ are also paid on the last working day of the month and include hours from approximately the middle of the prior month through approximately the middle of the current month. However, the first paycheck on October 31, 2023 following the transition will only include hours from October 1, 2023 until the end of that pay period (October 21, 2023) because the hours from September 17-30, 2023 will have already been paid on the September 30, 2023 paycheck. Therefore, there will be a lag in pay experienced by staff transitioning from ‘hourly paid salary’ to ‘hourly’ pay period.

To address the lag in pay, UNI has elected to give affected staff one-time transition lump sum payments during October, November and December 2023 for this specific University-wide transition. These payments are intended to keep gross earnings steady during the initial transition to allow you to better save and prepare for future paycheck fluctuations based on the number of processed timecard hours worked in the given pay period.

How will the one-time transition payments be calculated?

The one-time transition lump sum payments are being calculated based on the staff member’s hourly rate as of October 1, 2023 and generally will not vary if the staff member transitions to a different hourly assignment or has changes in their current assignment or rate of pay during this timeframe. The transition payments may be ended or modified if the staff member terminates employment, begins unpaid leave or moves to an FLSA exempt position during the transition period.

Do I need to pay back my transition payment?

No, these lump sum transition payments are not loans, meaning you will not need to pay this money back. Transition payments are being provided to allow you to better save and prepare for the transition from 12 equal paychecks to fluctuating paychecks based on the number of processed timecard hours worked in the given pay period.

Will the transition payments increase my overtime rate of pay?

No, the transition payments are being provided at the university’s discretion and are not used in the calculation of overtime rates of pay.

Will TIAA or IPERS contributions apply to the transition pay?

No, these transition payments do not qualify for employee or employer retirement contributions.

Will I receive time off accruals from the transition payments? [Updated: December 11, 2023]

No, these transition payments do not qualify for vacation or sick time off accruals. This transition will not result in a loss of vacation and sick time off accruals.

How will my monthly time off accruals be calculated? [Added: December 11, 2023]

Monthly accruals will be figured and applied on all paid hours up to your FTE as documented on processed timecards. In addition to ‘regular’ hours, all paid time off hours are also used in figuring accruals. Accruals are from the first day of the month to the last day of the month and are posted when the following month’s payroll is completed. The accruals will fluctuate slightly based on the number of work days in the pay period.

Will I receive notification of the amount of my transition payment?

When the transition payment Personnel Action Form (PAF) processes sometime in October, affected staff will receive a copy of the PAF in their university email. The PAF will identify the gross payment amounts for October, November and December 2023.

After the transition payments end, what should I expect to see in terms of my gross earnings each month going forward?

After the transition payments end, gross earnings will be based on the number of processed timecard hours worked in the given pay period. Some pay periods include more days than others. Therefore, some months an employee’s gross earnings may be more than before the October 1, 2023 change and other months they may be less.

Click on the following image to view a Merit illustration.

Click on the following image to view a P&S illustration.

As a staff member impacted by this change, what do I need to do?

After the transition payments end, gross earnings will be based on the number of processed timecard hours worked in the given pay period. Some pay periods include more days than others. Therefore, some months an employee’s gross earnings may be more than before the October 1, 2023 change and other months they may be less.

It has always been critical that timecards are submitted and approved by established deadlines so any variations from the normal scheduled hours can be accounted for and paid timely; however it will be even more critical moving forward. Timecards should be submitted as soon as your work week has concluded. As a reminder, timecards cannot be submitted until after the time is actually worked.

Who should I contact if I have further questions?

Further questions may be directed to the OBO/Payroll Office at payroll@uni.edu or 319-273-2162 or HRS at hrs-employment@uni.edu or 319-273-2422.

Is UNI considering an additional change to move from monthly to bi-weekly payroll frequency? [Added: September 12, 2023]

With a 12 month implementation timeframe for the UNIWorks project that began this past summer, it was determined to be too large of a change to implement in addition to all of the other implementation activities. Monthly payrolls are easily accommodated in Workday, whereas the ‘hourly paid salary’ pay basis would have required manual workarounds to implement.

How do I calculate what my gross earnings will be beginning in January 2024 (after the one-time transition payments have ended) since some pay periods contain five weeks and some contain four weeks? [Added: September 12, 2023]

For the pay periods with five weeks, take the hours you work on a weekly basis times five and then times your hourly rate of pay to determine your approximate gross earnings for that pay period. For the monthly pay periods with four weeks, take the hours you work on a weekly basis times four and then times your hourly rate of pay to determine your approximate gross earnings for that pay period.