A technically simplified pay system is in the works to replace Phoenix. But what about the way acting pay is used? Can that be changed, too?
by Kathryn May. Originally published on Policy Options
September 8, 2024
The pay bump that comes from temporarily filling in for senior colleagues is deeply rooted in the culture of Canada’s public service, a staple for thousands of bureaucrats in a way not seen in other sectors.
But acting pay has created a longstanding backlog of troubles that the government paymaster doesn’t want to move over to the new system it is building to replace the beleaguered Phoenix pay system.
The backlog is gradually being cleared by a cadre of pay advisors who have to manually process the acting-pay transactions. Public Services and Procurement Canada (PSPC), the paymaster, is testing a new AI system to help with the task. Insiders have codenamed it Buffy the Backlog Slayer.
As of July, about 77,000 late or unfinished acting pay cases were sitting in backlog.
It’s unclear how much of payroll is spent topping up paycheques with acting pay. The federal pay regime is one of the most complicated in the country.
But acting pay is on the wish list of issues that Treasury Board and unions hope to hash out when they meet later this fall for an unprecedented round of bargaining to simplify the myriad of rules in collective agreements.
The government wants an industry-standard pay system without all the customization Phoenix needed to handle thousands of quirky government rules and practices.
Different rules, different collective agreements
At Treasury Board, Francis Trudel’s job is to simplify pay in collective agreements. As the associate chief human resources officer, he is also examining ways to standardize practices and change behaviour so they don’t have a “downstream impact” on pay.
“It is not only an IT problem. It’s also an HR problem because we need to change some of our behaviour if we want to get out of that complexity and change a little bit of the culture,” said Trudel.
Last year, employees sent in 531,000 requests for acting pay. That is more than the number of public servants. But people can fill in for someone more than once over the course of year. About 93,000 people filed those requests, it turns out, whether in acting positions for a few days, weeks or months, according to PSPC.
Someone filling in for a job at a higher classification, whether it’s one level above or stepping into the boss’s shoes, gets the higher pay. But the rules vary by job classifications, which are enshrined in various collective agreements. As a result, acting pay can kick in after one day for some people or after three days for others.
Executives are not unionized and don’t qualify for acting pay until they have filled a position for three months.
Unionized workers – most of the workforce – fill the largest number of acting positions. The administrative services group uses acting pay most often. Last year, it filed 136,000 transactions. At the very top are AS-2 jobs, with 30,000 instances.
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An acting position can range from stepping in for someone who is sick or filling in for someone on long-term sick leave or parental leave. It can be filling a vacancy until someone is hired, which in the public service can take more than eight months.
Acting positions are also used to groom employees or test-drive them for promotions. They are a way to develop talent. But filing a vacancy takes someone from their job, which in turn has to be filled, and on it goes.
Managers taking holidays can rotate two or three employees into their jobs rather than appoint one. Critics argue acting pay often ends up being used as a “way to spread money around” or get extra pay for “warming a seat.” They’ve argued the volume of acting transactions could be reduced by imposing standard minimum periods.
Trudel said acting pay has become so rooted in the culture that people are put in acting positions without even doing the range of duties and responsibilities that go with the job.
“If they’re not, why are we paying-acting here?” said Trudel.
He has no issue with short-term acting positions, even for just two days, if people are taking on responsibilities beyond their usual authority. But should acting pay go to someone assigned to simply cover for an absent colleague?
The road to simplification
Technology experts say acting pay should have been simplified before Phoenix was built.
Until this kind of rule and practice is fixed, “it might be cheaper to bring a bag of money into the office every two weeks and say help yourself,” said a technology consultant at the height of the Phoenix pay crisis. “This has to get fixed and to do that means going back to how they run the business,” said the person, who was not authorized to speak publicly.
Unions are open to simplification as long as it doesn’t reduce pay. They have argued the government should just apply the most generous entitlement.
Michele Larose, a PSPC spokesman, said the complexity of acting pay will require more than simplifying the allowances and entitlements that create so much of the manual work for compensation advisors.
To handle federal pay, Dayforce, which is building the new system, will need to install cloud extensions. They are considered cheaper and less risky than customization. The company has so far identified 11 such extensions.
“The work undertaken by the Treasury Board … to simplify complex pay rules is crucial,” Larose said in an email. “If these rules are simpler and more standardized, it will be easier to program and automate them in the current system or in a new modern HR-and-pay solution.”
The auditor-general’s first report into Phoenix found acting pay requests accounted for about one in four cases in the backlog, making it one of the biggest sources of problems.
Phoenix was built for real time. Transactions had to be sent in on time or in advance. This was a big cultural change for public servants, who historically had been paid retroactively and were accustomed to sending in premiums for acting pay, overtime and shifts after-the-fact.
Every payday, Phoenix choked on late or inaccurate acting-pay requests until PSPC found a fix in 2020 – known as Retro-Redesign.
Since the fix, employees in acting positions are getting their extra pay. Compensation advisors, however, still have to manually adjust everything else, such as such as union dues, allowances and other entitlements.
This article was produced with support from the Accenture Fellowship on the Future of the Public Service. Read more of Kathryn’s articles.
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This article first appeared on Policy Options and is republished here under a Creative Commons license.