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 tested and confirmed the technical viability of a commercial integrated human resources and pay solution that could meet the varied and complex HR and pay needs of the Government of Canada
• 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 the Government of Canada regarding whether or not it should replace the current pay system and the 32 human resource systems that are currently in use

If pressed on Dayforce:

• The Government has been exploring options to move to a new human resources and pay system that meets the needs of its employees
• Since 2022, we have been testing the Dayforce application, a commercial off-the-shelf global software-as-a-service human resources and pay solution
• The testing is done in a simulated environment, against the complex HR and pay landscape that currently exists across departments and agencies
• It has demonstrated that Dayforce is a technically viable option for the next modern HR and pay system for the Government of Canada
• To ensure best results, improvements to the way the federal public service manages HR and pay processes will also be required
• Over the coming months, the Government will continue to expand testing, and will design the system to its specific needs, while exploring options for simplifying HR processes and procedures
• To support this work, Budget 2024 proposes $135 million in support of the Next Generation Human Resources and Pay initiative, including measures to improve human resources and pay data management
• A final recommendation on the way forward for HR and pay is expected later this year

If pressed on the backlog:

• As of May 22, 2024, the overall queue of transactions waiting to be processed at the Pay Centre has decreased by 32% since the peak of January 2018, representing a reduction of 205,000 transactions
• As of May 22, 2024, there are 213,000 outstanding transactions over one year old, approximately the same from the previous month
• Progress in reducing the queue of outstanding transactions has slowed as a result of significant increases in transactions received at the Pay Centre
• Significant staffing efforts to build capacity at the Pay Centre have been successful. Since September 2022, the Pay Centre has onboarded approximately 1,100 new compensation employees to support Pay Operations, while also expanding the skillsets of its existing workforce. 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 renewed public dashboard:

• The reason for the renewed and improved Public Service Pay Dashboard is to better reflect the experience of public servants and the current reality of our pay operations
• Our goals of processing 95% of transactions within service standards, and having no transactions older than one year, remain unchanged
• Instead of reporting against a fixed volume of cases deemed to be ‘normal’ workload, our new measures recognize that Pay Centre workload fluctuates in accordance with seasonality of HR activity, and also provides improved transparency on how we’re doing against set service standards
• The Dashboard is now focused on the total number and age of outstanding transactions at the Pay Centre, presented in a user-friendly format

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 June 10, 2024, new rates of pay have been updated in the pay system for approximately 330,000 employees
  • New salary rates were updated within 4 to 6 weeks of the agreement signature

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 2024, net intake increased by 64%, but manual workload only increased by 47%
• 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

If pressed on specific actions:

• We have introduced MyGCPay to all departments and agencies served 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
• In July 2023, we introduced external access to MyGCPay, so employees on leave or former employees can have secure access to the tool outside of the Government of Canada network
• 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 February 14, 2024, pre-2020 outstanding transactions decreased from 117,000 to 39,000 (67%)
• In addition, we are increasingly meeting service standards. In 2023, the Pay Centre met service standards 83% of the time on average, on par with 2022, and improved from 80% in 2021, and 72% in 2020

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

In November 2023, the Next Generation Human Resources and Pay (NextGen HR and Pay) Initiative team, formerly with Shared Services Canada, officially joined Public Services and Procurement Canada.

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 the testing with pilot departments within government as part of phase 1, the Dayforce solution was deemed technically viable to provide human resources and pay services for the Government of Canada. The enterprise strategy will build on the testing 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 in 2022, 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  June 10, 2024, the new rates of pay have been updated in the pay system for approximately 330,000 employees.

For the 2022 round of collective agreement implementations, and similar to the 2018 round, 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.

In July 2023, we introduced external access to MyGCPay, providing inactive employees, former employees and employees without access to the GC network (i.e., Phoenix Self-Service or CWA) secure access to their pay and benefits information.

• We have put in place a significant number of system enhancements and fixes, which have helped bring increased stability to the pay system and overall pay administration environment
• To date, $3.65 billion has been invested in Phoenix