Phoenix Pay System - Shit's Horrible

[Colin Parkinson]

My department has not submitted any acting pay requests in a year, as they are afraid that it will stop peoples pay or start paying them incorrectly. They are recording it manually in order to pay people once things are fixed. So those acting assignment requests won't show up anywhere but are still Phoenix related problems, that's a department of 5,800 people, and it's likely we are not the only ones withholding pay adjustment requests. 

 

[dapaterson]

So here's an interesting wrinkle.  A Canadian HR/Payroll specialist has a blog; in 2013 he wrote about reporting overpayments on T4s.

Money quote:

Employers have to treat outstanding employee debt, resulting from an overpayment made in error, as a low-interest loan. As with any other no or low-interest loan, employers must report a taxable benefit, calculated on prescribed interest rates.

https://alanrmcewen.com/2013/12/18/t4-reporting-for-overpayments/


EDIT: CRA link: https://www.canada.ca/en/revenue-agency/services/forms-publications/publications/t4130/employers-guide-taxable-benefits-allowances.html#P887_111004

A loan can include any other indebtedness such as the unpaid purchase price of goods or services, or an overpayment of salary that your employee repays you over a period of time.

The taxable benefit the employee receives in the tax year is the total of the following amounts:
a.the interest on each loan and debt calculated at the prescribed rate for the periods in the year during which it was outstanding
b.the interest on the loan or debt that was paid or payable for the year by you, the employer (for this purpose, an employer is a person or partnership that employed or intended to employ the individual and also includes a person related to the person or partnership)
c.minus the total of the following amounts:
the interest for the year that any person or partnership paid on each loan or debt no later than 30 days after the end of the year
d.any part of the amount in b) that the employee pays back to the employer no later than 30 days after the end of the year
Note
Sometimes these rules do not apply. For more information, see Exceptions.

If the employee receives a loan or incurs a debt because of employment, report the benefit in box 14, "Employment income," and in the "Other information" area, report the interest benefit under code 36. Report any forgiven loan principal amounts under code 40.

 

[Lumber]

Wait wait wait.

So, if my employer accidentally over-pays me, I owe the government money because I received a taxable benefit in the form of an unwanted, unsolicited, mistakenly awarded, "no or low-interest" loan?

I have more to this if the answer is yes.

 

[dapaterson]

Wait wait wait.

So, if my employer accidentally over-pays me, I owe the government money because I received a taxable benefit in the form of an unwanted, unsolicited, mistakenly awarded, "no or low-interest" loan?

I have more to this if the answer is yes.

That is what the rules appear to say.  However, I am not a tax lawyer.  But the confusion being generated by Phoenix continues to grow...

 

[Colin Parkinson]

Keel hauling, Yardarm, just saying......

quote; "“Currently 76 per cent of our employees have outstanding cases and 100 per cent of seagoing employees are affected,” wrote Deputy Fisheries Minister Catherine Blewett. The Coast Guard is an agency within the Fisheries portfolio."

https://ipolitics.ca/2017/12/11/wernick-combing-public-service-ideas-fixing-phoenix/

 

[dapaterson]

Keel hauling, Yardarm, just saying......

quote; "“Currently 76 per cent of our employees have outstanding cases and 100 per cent of seagoing employees are affected,” wrote Deputy Fisheries Minister Catherine Blewett. The Coast Guard is an agency within the Fisheries portfolio."

https://ipolitics.ca/2017/12/11/wernick-combing-public-service-ideas-fixing-phoenix/

Wow!  100%!  I'm certain someone is going to find a way to spin that into an impressive performance metric to get more bonus pay.

 

[Gunner98]

Recent chats with employees who have contacted their union stewards and several levels above them, they were told there is no recourse that the unions foresee being taken at this time - no work stoppages, work-to-rule, strikes.  There has been and will be occasional letter writing campaigns and protests.  Much like the PARs and complaints in regards to pay issues, they will go unnoticed because the government does not care about its public servants any more than they do about the uniformed members.

I wish the news/response was in the words of Russell Peters father, "somebody gonna get hurt real bad"! 
https://www.youtube.com/watch?v=w3EjFgWlW2w

Instead it sound more like Rascal Flatts - Let it Hurt lyrics:

"Seven forty two in the morning
Eight seconds before it all sinks in
Put your best face on for the world
Fake another smile and just pretend
But you're just puttin' off the pain
Nothing's ever really gonna change"

 

[Lumber]

That is what the rules appear to say.  However, I am not a tax lawyer.  But the confusion being generated by Phoenix continues to grow...

So, if it's a taxable benefit, let look at it this way.

Government over pays me $2000 at 0% interest.
The CRA assume that that is a taxable benefit. Had I taken a loan from the bank, I'd pay, lets say, 5%.
Amortize that over the year, compounded monthly, and the total interest owed would be $102.32.
So, the CRA is saying I received a "taxable benefit akin to $102.32 ".
Using the Federal and Provincial tax rates for my income level, that works out to about $38.02 that I would owe the government in taxes.

Ok, so I take the $2000 and invest in in a GIC at 2% and walk away with $2,040.37, earning a net of $2.35. Yay for me.
But GICs are locked it. What if they claw the $2000 back before it reaches annuity?
Ok, so invest in a Mutual Fund instead. Same amount of work, potentially higher rate of return. Oh wait, you picked the wrong one and you actually just lost money.

I can't believe they would expect the average joe to go through all this over a few dollars taxes.

Even if they accidentally doubled my salary, it works out to roughly $2000 in taxes.

Hurrah for the small guy.

 

[dapaterson]

Deputy minister letters on what they are doing to deal with Phoenix are now posted  to the PSPC website at:

http://www.tpsgc-pwgsc.gc.ca/remuneration-compensation/services-paye-pay-services/centre-presse-media-centre/lettres-dm-dm-letters/index-eng.html

 

[Good2Golf]

Deputy minister letters on what they are doing to deal with Phoenix are now posted  to the PSPC website at:

http://www.tpsgc-pwgsc.gc.ca/remuneration-compensation/services-paye-pay-services/centre-presse-media-centre/lettres-dm-dm-letters/index-eng.html

Interesting that PSPC DM Lemay takes a dive on the most critical of her Department's 3-pillars, Administration of Govt Pay - i.e. Phoenix itself

DM PSPC's letter to the Clerk of the Privy Council

Dear Mr. Wernick:

In response to your letter which we received on November 2, 2017, I am pleased to provide you with Public Services and Procurement Canada’s (PSPC) current and upcoming efforts toward HR-to-Pay stabilization.

PSPC is uniquely positioned as being both the administrator of Government Pay as well as a client. As a result, our departmental focus is best depicted in the three pillars identified below:
•Administrator of Government Pay
•PSPC as a Client
•Internal Services to Support the Administration of Government Pay

The report enclosed herein focuses on the two last pillars and outlines the efforts and the corresponding impact that PSPC has contributed towards HR to Pay Stabilization from both the perspectives of a client department and as an internal service provider supporting Pay Administration...

So essentially they've provided the following in the DM's letter:

REPORT: PSPC efforts to support HR to pay stabilization

This infographic depicts the 3 pillars of PSPC’s work.

Pillar 1: Administrator of Government pay

This work includes:
•HR to Pay
•Pay Centre
•Phoenix
•Project Management Office

Pillar 2: PSPC as a client

This work includes:
•supporting our employees
•partnerships
•communications and training

Pillar 3: PSPC internal services to support the administration of Government pay

This work includes:
•Human Resources
•Finance
•Communications
•Accommodations

Not sure how that seems professional or acceptable?

Regards
G2G

 

[Oldgateboatdriver]

I read some of those DM letters (not all).

What a bunch of CYA bull. I dare anyone here to actually take one letter - any one and actually explain exactly what is being done in any given department and how it is actually fixing anything. And their release through the press centre is proof that all this is is public relation stunt, trying of all things to pull wool over the eyes of civil servants on how, in a crisis, the civil service screws things up instead of resolving it while waiting for the crisis to subside (as if they didn't know!).

Those letters are typical upper crust civil service bumf that make it sound like activity is going on and improperly equates that with achieving something. In short, and to quote Zed about those higher civil servants: "You are everything we've come to expect from years of government training".

If real people's pay and lives weren't at stake it would be funny in exposing governmental incompetence at dealing with crisis.

Where are the real answers to the real questions: Who is fixing Phoenix, or working on implementing a replacement that will work? When do they expect to be done? How much will it cost? When will all the cases arising from it be resolved? Who will be held accountable for the screw-up? Are we going to sue the contractor who developed it (or not as it would expose that they merely took the garbage they were given by the government itself)?

 

[dapaterson]

Pay is a process, not a computer system.  The failures are systemic through that process (including the computer system).  Thus the reticence to reveal anything of substance - the emperor has less than no clothes, and no bureaucratic organization will ever willingly disclose their own incompetence.  Far better to spend more public money to hide it.  (That the major PS union, PSAC, has been largely silent is due primarily, in my opinion, to their realization that they stand to gain more members as the Government continues its disorganized scramble to throw more money at the problems in the absence of anything resembling a plan).

As a friend observed "I'm owed over $18,000; if I were to take that money I'd be a criminal.  Somehow, those who have never paid me are not criminals."


My personal opinion?  It's time to eliminate most central service organizations within the public service (pay, travel, IM/IT).  They present significant institutional risk; as we see with Phoenix, failure is catastrophic.  Monopolies (whether public or private) increase cost and stifle innovation.  Imagine if every department sought out payroll services independently.  There would be a marketplace, where innovation would occur and there would be competition on quality and price.  If the payroll system for National Defence failed, they could adopt/adapt the one used by Global Affairs Canada.


But muddle on is the end state.  Meanwhile, I'm owed on the order of $10K (before taxes), with no indication of when I will be paid; no indication that the Government will comply with its own Directive on Payments (that is to say, payment of interest on overdue accounts); for one of my problems, they closed it as "complete" to run up their metrics, and sent a letter saying "We know we owe you money, but we don't know how to pay it back".

Long term institutional impacts are severe - there's a major erosion of trust between employees and the employer.  I'm expecting some sort of work action(s), timed to embarrass the government - whether wildcat strikes; a "sick of Phoenix" sick leave day across the public service; or some other actions to keep this in the public eye.

 

[dapaterson]

One further thought: A strike would in some ways be striking at the Government at their most vulnerable place.  Imagine if the PS did a half-hour walkout.  That would be ~250,000 people whose pay would have to be docked.  That's 250,000 transactions that would have to be processed... in Phoenix - or roughly three months of the pay office's processing capability (which PSPC claims is 80,000 cases per month).

 

[Oldgateboatdriver]

Long term institutional impacts are severe - there's a major erosion of trust between employees and the employer.  I'm expecting some sort of work action(s), timed to embarrass the government - whether wildcat strikes; a "sick of Phoenix" sick leave day across the public service; or some other actions to keep this in the public eye.

I am not sure a "wildcat" strike would even be considered a strike.

There was an old joke under the communist rule of Eastern Europe: "As long as they pretend to pay us, we'll pretend to work".

Being paid for work is the single underlying basis of any work contract. So it wouldn't even be a "strike" or "labour action" if employees simply told the government "You don't pay me, I don't come in to work".

 

[Colin Parkinson]

Pay is a process, not a computer system.  The failures are systemic through that process (including the computer system).  Thus the reticence to reveal anything of substance - the emperor has less than no clothes, and no bureaucratic organization will ever willingly disclose their own incompetence.  Far better to spend more public money to hide it.  (That the major PS union, PSAC, has been largely silent is due primarily, in my opinion, to their realization that they stand to gain more members as the Government continues its disorganized scramble to throw more money at the problems in the absence of anything resembling a plan).

As a friend observed "I'm owed over $18,000; if I were to take that money I'd be a criminal.  Somehow, those who have never paid me are not criminals."


My personal opinion?  It's time to eliminate most central service organizations within the public service (pay, travel, IM/IT).  They present significant institutional risk; as we see with Phoenix, failure is catastrophic.  Monopolies (whether public or private) increase cost and stifle innovation.  Imagine if every department sought out payroll services independently.  There would be a marketplace, where innovation would occur and there would be competition on quality and price.  If the payroll system for National Defence failed, they could adopt/adapt the one used by Global Affairs Canada.


But muddle on is the end state.  Meanwhile, I'm owed on the order of $10K (before taxes), with no indication of when I will be paid; no indication that the Government will comply with its own Directive on Payments (that is to say, payment of interest on overdue accounts); for one of my problems, they closed it as "complete" to run up their metrics, and sent a letter saying "We know we owe you money, but we don't know how to pay it back".

Long term institutional impacts are severe - there's a major erosion of trust between employees and the employer.  I'm expecting some sort of work action(s), timed to embarrass the government - whether wildcat strikes; a "sick of Phoenix" sick leave day across the public service; or some other actions to keep this in the public eye.

Having gone from DFO to TC, DFO pay was horrible and screwed up. TC pay office was switched on, responsible and supported by management by ensuring that any positions had proper funding and no funky stuff going on. DFO was using capital monies to pay salary at times, a big no-no. I pointed out to our DM last month that the fix is bringing back our old pay system. They said the issue then is where it interacts with Phoenix. They don't realize this is a flightless dodo that will never rise from the ashes. 

 

[dapaterson]

For fun: Read what PSPC's senior staff were bragging to professional organizations before go live. 

http://www.fmi.ca/media/765533/Rosanna%20Di%20Paola_GoC%27s%20Pay%20Transformation.pdf

I like the "Final Considerations" - Ensure you have solid contingency plans (and funding) in place

:rofl:  :rofl:  :rofl:  :rofl:  :rofl:  :rofl:

 

[mike63]

Well my last day in the PS was yesterday, Jan 22nd, I'm curious to see either how long I will continue to get paid or, now long it's going to take to get my pension!

 

[tree hugger]

Just checked my acct.  I got paid again today from the PS even though I've been on LWOP since 1Oct... :not-again:

Thought about quitting altogether, but I imagine I'd still be paid in that scenario too... :facepalm:

 

[Colin Parkinson]

Well my last day in the PS was yesterday, Jan 22nd, I'm curious to see either how long I will continue to get paid or, now long it's going to take to get my pension!

The advice in my last recent pension course was to get a letter from your manager stating the last day you worked and at what level. The pension office will use that as a baseline to start your pension and make any corrections when Phoenix finally coughs out your last day and pay calculations. They also recommended that your last day coincide with a payday to make payout easier.

 

[dapaterson]

And, after the year end panic to get everything recorded for people who owe money... "Oops!  The problem is bigger than we thought!"

https://ipolitics.ca/2018/01/26/phoenix-woes-capacity-problems-mean-overpayments-wont-get-processed-time-union-head-says/


Of course, the question of "When will there be a panic to pay people what they are owed?" remains unanswered.