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HomeMy WebLinkAboutAgenda - 06-19-2012 - 5pORANGE COUNTY BOARD OF COMMISSIONERS ACTION AGENDA ITEM ABSTRACT Meeting Date: June 19, 2012 Action Agenda Item No. 5- � SUBJECT: Reconciliation of Longevity Over /Underpayments Since January 1, 2004 DEPARTMENT: Finance and Administrative PUBLIC HEARING: (Y /N) No Services ATTACHMENT(S): 1. Orange County Personnel Ordinance, Article IV, Section 28 -48 INFORMATION CONTACT: Clarence Grier, Finance and Administrative Services Director, (919) 245 -2453 Sharon Goode Laisure, Interim Human Resources Director, (919) 245 -2552 PURPOSE: To approve approximately $15,500 in longevity overpayments issued from FY 2006 -07 through FY 2011 -12, to 12 employees and not require repayment, and to approve the issuance of longevity payments totaling $1,066 to two employees who were underpaid longevity from FY 2004 -05 through 2007 -08. BACKGROUND: In July 2003, the County implemented the Munis business system to store personnel data, such as employment dates, prior Orange County service, and pay rates, and to process payroll. As staff transitions occurred, institutional knowledge regarding original configurations in Munis was lost and staff began utilizing date fields (which store information for Longevity Pay calculations) in a different manner than originally intended. The variation in the way data was entered and stored only affected some employees with prior Orange County service who worked for Orange County, left employment and were rehired. Currently, there are 58 active permanent employees with a break in service due to separate periods of employment with Orange County. Of these employees, 29 have ten or more years of Orange County service and are eligible to receive Longevity Pay in accordance with Article IV, Section 28-48 of the Orange County Personnel Ordinance (Attachment 1). Human Resources and Financial Services staff identified discrepancies in Munis longevity reports generated by each department. Munis created a Support Team that was tasked with determining how the County's business system was designed to pay longevity. The Team identified the original payment configuration and reported it is unusual for Munis to calculate longevity payments in this manner for an organization. Due to the way staff have entered employment dates for employees with prior Orange County service, Munis's longevity calculation method resulted in paying some employees improperly (at either a higher rate than eligible and /or on the incorrect date). This resulted in overpayments to approximately 6 employees each year since 2007 (just under 2% of all employees who have received Longevity Pay each year) for an average total of $3,000 per year. 2 In April 2012, HR staff became aware of the problem and thoroughly analyzed longevity payments made since January 1, 2004 t o all active employees with prior Orange County service. This analysis revealed that the employees who have most consistently received correct longevity payments were set up when Munis was originally configured. When the method of recording prior service changed in 2007, some employees with prior Orange County service began receiving higher payments and /or payments made earlier or later than provided in the Personnel Ordinance. Since 2007, longevity overpayments of approximately $15,500 have been made to 12 active employees with prior Orange County service. In addition, some employees with prior Orange County service have received longevity payments on dates that do not coincide with the effective date identified in the Personnel Ordinance. Human Resources staff will correct Munis data for twenty employees with prior Orange County service who have received incorrect longevity payments and /or correct longevity payments on incorrect dates. Each employee will be notified in writing of the action and the effects on their next longevity payment. FINANCIAL IMPACT: The majority of the longevity overpayments have been made in previous fiscal years. In FY 2011 -12, $1,642 in overpayments have been made. The total financial impact in this fiscal year, including issuing funds for the underpayments made from 2005 to 2008, is $2,708. RECOMMENDATION(S): The Manager recommends the Board approve: • Approximately $15,500 in longevity overpayments, issued from FY 2006 -07 through FY 2011 -12 to 12 employees (ranging from $386 to $2,816 per employee) and not require repayment; and • The issuance of longevity payments totaling $1,066 to two employees who were underpaid longevity from FY 2004 -05 to 2007 -08. 3 Sec. 28-48. - Longevity pay. (a) General. The County provides Longevity Pay to recognize long -term service of Permanent employees, both Full Time and Part Time (regularly, scheduled at least 20 hours each workweek) who have completed at least ten years of total Orange County service as a permanent employee. (b) Calculating Longevity Pay. Longevity Pay is calculated by multiplying the employee's base annual salary by the appropriate percentage as follows: Years of Total Oranae County Service Longevity Pay Rate 10 but less than 15 1.50% 15 but less than 20 2.25% 20 but less than 25 3.25% 25 or more years 4.50% (c) Payment. (1) To receive Longevity Pay, the employee must be in active employment status on the effective date. (Payment is not made on a pro -rated basis for a terminating employee or an employee on an extended leave without pay.) (2) The Longevity payment is made in a lump sum on the payday for the pay period in which effective. (3) Applicable deductions are made for Social Security, retirement, state and federal taxes. (d) Effective Date. (1) Longevity Pay is effective on the pay period beginning date following the employee's most recent employment anniversary date. If the employee's anniversary date falls on the pay period beginning date, Longevity Pay is effective on that pay period beginning date. Note: If the employee has prior service as a permanent employee with Orange County, this service is used in determining the employee's eligibility for Longevity Pay and the amount for which eligible but does not change the effective date. (e) Longevity Pay is not considered a part of base annual pay for classification or other pay record purposes. (Ord. of 06 -07 -1976, eff. 08 -01 -1976; Amend. of 09 -07 -1993, Art. IV § 19.0, eff. 07 -01 -1993)