Question Period Note: Update on Pay Stabilization - support for employees and investments

This note focuses on efforts and progress to date to provide support to employees and stabilize the administration of pay, and on financial investments in Phoenix.

Notes:

• All questions related to the mental health of public servants, collective agreements and compensation for Phoenix damages agreements should be directed to the President of the Treasury Board
• Issues related to income tax are under the purview of the Canada Revenue Agency

• The Government of Canada is committed to supporting employees and continues to take action on all fronts to resolve public service pay issues
  • Since the launch of Phoenix, we have implemented a series of measures and made consistent progress towards pay stabilization
  • These measures will ensure that we will continue to progress towards our goal of processing new transactions within service standards 95% of the time, and having no outstanding transactions over one year old
  • The Government has also confirmed the technical viability of a commercial human resources and pay solution to inform a recommendation to replace the current pay system and the 32 human resource systems currently in use
  • The confirmation of the technical viability of the solution, and the findings from the testing of that solution will be used to inform a recommendation to replace the current pay system and the 32 human resource systems that are currently in use

If pressed on the backlog:

• As of November 2023, the backlog of financial transactions beyond the normal workload has decreased by 38% since the peak of January 2018, representing a reduction of 146,000 transactions. Over the same period of time, the overall queue of transactions waiting to be processed at the Pay Centre has decreased by 29%, representing a reduction of 181,000 transactions
• Progress in reducing the queue of outstanding transactions has slowed as a result of significant increases in transactions received at the Pay Centre
• I note that significant staffing efforts are underway to build capacity at the Pay Centre. Since September 2022, the Pay Centre has onboarded approximately 900 new compensation employees to support Pay Operations. We expect ongoing improvements as recent hires become more proficient in pay processing
• We continue to review the future resource needs of the Pay Centre to ensure public servants are paid accurately and on time

If pressed on collective agreement implementation – 2022 contracts:

• Implementation of the 2022 round of collective agreements (CA) is well underway
• Public Services and Procurement Canada continues to implement new salary rates, mass retroactive payments and other provisions within negotiated timelines
• As of November 14, 2023, new rates of pay have been updated in the pay system for approximately 250,000 employees.
  • New salary rates were updated within 4 to 6 weeks of the agreement signature
• The Pay system began executing the mass retroactive process for the Program Administrative services (PA) group October 7
  • Retroactive payments for approximately 157,000 active and inactive employees were paid on October 25
  • The first batch of $2,500 lump-sum payments were paid to eligible employees on November 8, 2023, for various groups
• As of November 14, retroactive payments have been paid to over 235,000 active and inactive employees

If pressed on support to employees:

• Public Services and Procurement Canada has implemented a series of measures focused on stabilizing the administration of pay. These include providing employees with greater support through our Client Contact Centre, introducing the Pay Pods model, and implementing technical fixes that have improved payroll processing, such as increased automation of transactions
• Improved automation has helped mitigate some of intake’s growth. Between 2019 and 2023, net intake increased by 57%, but manual workload only increased by 41%
• Financial support is and will remain available for employees missing any of their pay. This support includes an emergency salary advance or priority payment. Flexible measures have been put in place to help minimize financial hardships for employees for the repayment of overpayments related to Phoenix pay system issues
• The Client Contact Centre escalates cases of hardship so they can be addressed quickly, and agents are trained to respond to situations where employees may be in distress

If pressed on specific actions:

• We have introduced MyGCPay to all departments and agencies serviced by Phoenix. MyGCPay is a web application that provides employees with a centralized and simplified view of their pay and benefits, to help employees better understand their pay
• We implemented a Retro Redesign Solution that further automates processing of individual late transactions and eligible mass retro payments
• In April 2021 we launched the MyGCPay stub – designed to be more user-friendly and to help employees better understand their pay
• We continue to focus on addressing outstanding transactions while also working towards processing new transactions within service standards 95% of the time. For example, from December 2020 to November 2023, pre-2020 outstanding transactions decreased from 117,000 to 45,000 (62%)
• In addition, we are increasingly meeting service standards. To date in 2023, the Pay Centre has met service standards 83% of the time on average, on par with 2022, and improved from 80% in 2021, and 72% in 2020

If pressed on Next Generation Human Resources and Pay initiative:

• The NextGen HR and Pay Initiative has tested a commercial solution against a number of complex scenarios that represent the Government’s HR and pay requirements
• This testing was done with pilot departments in a simulated environment, separate from the existing system used to pay employees
• The Government has also confirmed the technical viability of a commercial human resources and pay solution
• The confirmation of the technical viability of the solution, and the findings from the testing of that solution will be used to inform a recommendation to replace the current pay system and the 32 human resource systems that are currently in use

Stabilizing the administration of pay

Since the launch of Phoenix, Public Services and Procurement Canada has implemented a series of measures focused on stabilizing the administration of pay.

In addition, we are focusing on other operational priorities in pay administration including pension arrears, terminations, and overpayments. We have improved service standard compliance while managing sustained increases of transactions submitted to the Pay Centre by departments and agencies, starting in 2021 and expected to continue going forward.

Employees who have been underpaid can request emergency salary advances or priority payments from their departments.

NextGen HR and Pay Initiative

The Next Generation Human Resources and Pay (NextGen HR and Pay) Initiative at Shared Services Canada now functionally reports to the Enterprise Pay Coordination Office.

The mandate of the NextGen HR and Pay Initiative was to assess the viability of adopting a commercially available, integrated Human Resources and pay Software-as-a-Service (SaaS) solution given the complexities of the Government of Canada’s human resources and pay requirements.

After multiple phases of testing with several pilot departments across the Government, Ceridian’s Dayforce solution has been deemed to be technically viable to deliver human resources and pay for the Government of Canada. The Initiative will build on results and findings to complete further design, planning, testing and validation on the scalability of this solution. These activities are needed to deliver an evidence-based recommendation to the Government of Canada on the future of HR and Pay.

Collective agreement implementation – 2018 and 2022 contracts

The 2018 round of Collective Agreement Implementation includes agreements signed in 2018 through 2023, and is nearly complete. To date, 2018 Collective Agreement Implementation salary adjustments and retroactive payments have been completed through the automated process for 147 Treasury Board of Canada Secretariat and separate employer agreements, representing over $2 billion in payments to employees (as of April 2023).

The implementation of the 2022 round of collective agreement started last year, and in the summer 2023, the Government of Canada began processing the first wave of signed agreements from the recent rounds of collective bargaining for major groups. As of November 14, 2023, the new rates of pay have been updated in the pay system for approximately 250,000 employees.

For the 2022 round of collective agreement implementations, and similar to the 2018 round of collective agreement implementation, we expect an overall average of approximately 10% of employees will see at least one transaction needing manual intervention. The results of each retroactive payment process are expected to vary due to a combination of many factors, including agreement complexity. We are on track to complete the 2022 collective agreement implementation within negotiated timeframes.

MyGCPay

MyGCPay is a web application developed by Public Services and Procurement Canada to help rebuild federal government employees’ confidence in the integrity of their pay. It provides employees with a centralized and simplified view of their pay and benefits. It helps employees identify pay issues earlier and allows them to monitor their open cases with more detail.

• We have put in place over 3,000 system enhancements and fixes, which have helped bring increased stability to the pay system and overall pay administration environment
  • To date, $3.5 billion has been invested in Phoenix