Staffing issues in Alaska’s payroll department are causing some of Alaska’s 14,000 state employees to receive their paychecks in error or late, and have resulted in the need for Alaska to stop temporarily employing one of its primary instruments for retaining and hiring employees.
In an August. 11 note addressed to commissioners who are responsible for departmental departments in the state Governor. Mike Dunleavy’s chief of staff informed the commissioners that the problems “are most likely due to excessively high vacancies in Payroll (over 40 percent). %).”
One-third of the 67 positions budgeted are not filled, according to officials from the Department of Administration, which is responsible for the majority of payroll. It’s around 46% and the department claimed that it’s been “around 45 percent for a period of time.”
In the email the Chief of Staff Tyson Gallagher said he is “putting a temporary, but immediate suspension” on agreements, letters of agreement, and other documents that the state may make use of to provide additional benefits or pay raises to individuals as well as groups of workers.
These documents “are among the only tools that you can use to be competitive for work in a competitive marketplace,” he told commissioners that the time it takes to process them has led to issues in the payroll department according to him.
Department is planning temporary outsourcing
Jeff Kasper, business manager of the Alaska Public Employees Association, the union that represents employees of the payroll Kasper said the issue has become more severe over the last several months.
The statement is supported with figures released from the executive branch which revealed a payroll staff unemployment rate of 35 percent in members of the Alaska Legislature earlier this year.
“They’re just one problem away from many people not being paid,” he said.
Kasper stated that employees of the department are doing their best as they’re able to, yet aren’t able to compensate for the lack of personnel.
“It’s it not payroll personnel who are to blame for this. Management is to blame,” he said, insisting that the staffing shortage is intentionally done justification for outsourcing the payroll tasks.
“I completely believe it’s a deliberate act. This isn’t an accident. This is an intentional act,” he said.
“No. This isn’t the case. The department has been recruiting actively for positions in the payroll department,” the Department of Administration stated in an email, saying that it was constantly advertising, offering incentives for signing-on and also paying retention bonuses.
Commissioner Paula Vrana, in charge of the department, turned down an interview request. the department replied to questions by email, six weeks after.
The agency has stated that it plans to obtain “temporary aid to contract negotiations” to assist with the issue. It has already completed the feasibility study required under its agreements with unions.
On August. 15th, the state signed the contract in partnership with CGI Inc., a Canadian IT company. CGI Inc. will provide four full-time employees who will work remotely in Alabama until February. 16. The first phase of work should be completed at the end of this month. Additionally, the state could pay up to $315,000 when the contract is executed.
In accordance with the agreement The state will be billed $45.50 each hour of the job of every payroll analyst. The state will pay $22.69 an hour to an equivalent employee in the state.
The department noted it was expected that suspension of the letters of agreement is likely to improve the situation. Each letter is subject to manual processing by payroll personnel. From July 2021 to the close of June 2021 states issued 163 of these letters. Between June 2022 and July 2023 the state issued the number 212. From July 1, it’s been issued with 28.
“We have witnessed a dramatic rise in LOAs that we receive,” the department noted.
In a presentation made to a subcommittee on the budget of the legislature in April, the department stated that it was experiencing difficulties because some payroll tasks are still performed using paper while other functions must be manually entered by payroll employees.
About 2,000 manual steps are handled in every 2 weeks according to lawmakers.
The new electronic tools are anticipated to aid in tackling this issue, the agency stated at the time, and the agency is planning to expand the level of automation that it employs. The plans are being developed as of Monday, and it hopes that they will streamline processing and make the process more effective.
In the short-term the department stated that it will temporarily transfer employees who have previous experience in payroll. These employees are removed off their job and assigned payroll.
It is working to up recruitment efforts according to the department.
The state’s problems exceed its ability to keep on top
Despite all the efforts, problems persist into the summer months, affecting several state agencies. The ferry system of the state is already severely understaffed. claimed it was losing employees due to payroll issues.
The Department of Administration is shifts payroll work over to the Department of Transportation in order to solve the problem However, issues elsewhere persist.
Heidi Drygas is director of the Alaska State Employees Association, which represents around eight thousand employees. She has said that certain state employees are waiting for hundreds of dollars or more due to problems with the payroll system.
The state’s agreements with unionized workers requires employees to provide the state with a “notice of pay issues” document to the state, which it is required to reply in 15 working days.
“I believe that we’re still dealing with some unanswered issues that occurred in September and October” she added.
“We’ve never experienced so numerous (problems) and have had so many issues that went unanswered,” she said.
Department officials say they keep a log about the volume of complaints they file every year, but the records aren’t always up-to-date because the staff isn’t there.
As of the beginning of this year there have been 550 notices recorded, however the department estimates that there around 700. In August of last year the payroll department had recorded more than 380 notices.
The reason for all notices is not always because of an incorrect payment the department claimed. It could also be a consequence of “confusion or errors at various stages of the record keeping, submission, and payroll processes.”
In March in March, the Department of Administration said 175 notices were not yet dealt with, and union officials believe that the number of not-resolved notices has increased.
Jordan Adams, who represents nearly 1,400 tradespeople, stated that many people are refusing to accept from state-run jobs.
“The payroll department is stretched so thin that in a few instances we’ve hired new transportation employees who weren’t pay for the first six weeks of their employment,” he said. “That’s unacceptable. If we can fill these posts with highly skilled workers, we shouldn’t hang on to these positions if the state does not provide them with.”
Increased wages are suggested as a way to fix the problem
Workers, union officials and others have argued that the state contributes to the problem of hiring in the absence of keeping the wages of state employees competitive against those in companies in the private market.
On the ferry owned by state Hubbard captain Gabriel Baylous told Sen. Lisa Murkowski and U.S. Transportation Secretary Pete Buttigieg it’s a big problem within his field.
“I’m earning about $150,000 per year to operate this vessel however, my peers are heading to cruise ships and earning $700,000 in the summer time, and some crew members on cruise vessels,” he said.
“I would rather not take it on because they’re only getting one day off per month during summer long, and I have children, and I have a pension, however my friends who do not have pensions are thinking, ‘it’s simple to do it,'” Baylous said.
The letters of agreement have permitted the state to periodically increase the amount of wages and benefits in order to recruit employees, which Adams stated proves that there are workers for hire if the state will pay.
“It’s no secret that people need fair wages and they’d like to be compensated for the work they do. The current crisis will continue until the state is able to provide the necessary funds to retain and recruit employees, and this goes to payroll,” Adams said.
The budget for the state’s operating expenses this year included a sum of $1 million for the Department of Administration to study whether salaries for state employees are a good idea to increase. The department announced that it is planning to engage an outside firm to conduct the study, but the firm has not yet been appointed.
This article was originally published in Alaska Beacon and is republished here with permission.
