The Federal Public Service is implementing pay in arrears, commencing with the pay period of May 21, 2014. Pay in arrears is different from the pay practices in place until now in that employees will now be paid after they have completed a period of work. Under the current system, employees’ pay was calculated and processed in advance, meaning that pay received on Wednesday was for work completed up to and including that Wednesday. With payment in arrears, instead of calculating and processing your pay in advance of the work being done, your pay will be calculated and processed after the work has been completed. This means that you will be paid for work that was done two weeks previously.

All employees were informed of the following:  To facilitate a smooth transition, on May 21, 2014, instead of a regular pay, you will receive a one-time transition payment with all the regular payroll deductions taken. This one-time payment does not represent a period of work, and is issued to you so that you continue to receive a payment every two weeks without interruption as we change to payment in arrears. Then, on June 4, 2014, you will receive your first regular pay under the payment in arrears process. This payment will reflect the work done in the two weeks prior to the payment, that is, for the period between May 8 and 21, 2014.

Employees will not see any disruption in pay. You will receive the same payment on May 21 as you normally receive. For administrative purposes, Public Works and Government Services Canada (PWGSC) is calling this a transition payment. When an employee leaves the public service, he or she will receive a final salary payment two weeks after the last day of employment. If there is a difference in the salary received in the May 21, 2014 transition payment and the salary being earned at the time the employee leaves the public service, that difference will be reflected in the final payment. So, if your salary has gone up between May 21, 2014 and your last day, you will receive the difference in the last payment. If there is no change in salary, you will likely not receive anything in the last payment. If for any reason, you are earning less at departure than you earned on May 21, 2014, the difference will have to be paid back to the government. This difference will be deducted from any available funds, such as overtime, annual leave, etc…

In its original announcement of pay in arrears, PWGSC planned to recover two weeks’ pay from each employee, over a one year period. This would have meant a reduction in take home pay for all employees. The bargaining agents objected and PWGSC agreed to a change. The change is the transition payment and the final payment at the end of employment with any required adjustments. It is our view that this is better for employees as it does not require any reduction in take home pay for any period of time.

All future employees will be on pay in arrears from the start of employment. This means that the first payment will occur four weeks after employment begins.

PWGSC has prepared a list of questions and answers. It can be found at the link below.