FAQs on Realignment of Faculty Payroll Year to Match Fiscal Year on July 1, 2011
Boston University will align the faculty payroll year with the University fiscal year on July 1, 2011. Faculty members and instructional staff with a 9-month academic year salary that is normally paid out over 12 months will receive 12 equal monthly salary payments for Academic Year 2011-2012 beginning in July 2011 and ending in June 2012. Under the new system, the salary payments in July and August are effectively “pre-payments” for the academic year which starts in September. The salary payment in June is a “post-payment” for the academic year which ends in May. You can read in more detail about this elsewhere in the Faculty Handbook.
In order to transition our continuing faculty to the new payroll year on July 1, we must distribute the salary that has been earned by faculty for Academic Year 2010-2011. This salary would have been paid in July and August 2011 under the prior system where the faculty payroll year ran from September to August.
—NEWS FLASH— The payments have been made, please check your Employee Self Service page (ESS) through the BU Works Portal to see your paystub if you are one of the 1232 CRC faculty who received this payment.
What is the “faculty payroll year?”
The payroll year is the 12-month year over which the annual salary is paid. In the past, this year ran from September 1 through the following August 31. Starting in 2011, the faculty payroll year will run from July 1 through June 30. The University’s Fiscal Year also runs July 1 through June 30.
Why are we moving the start date of the faculty payroll year?
On July 1, 2011 we implemented a new enterprise management system for the University which uses software known as SAP. Switching to this new system has given us the opportunity to streamline and align many business processes, and faculty payroll is one of them.
What will I be paid each month?
Right now, most full-time faculty on the CRC have a 9-month academic year salary and receive that salary in 12 equal monthly payments. That will not change.
But I’m not like most faculty – I chose to receive my 9-month academic year salary over 9 months, and either I don’t get paid the remaining months, or I get paid from another source, like a grant. Can I continue doing that?
Yes, you can. Please remind the person who processes payroll in your unit, so that they code you correctly in the new system.
I’m a faculty member on the medical campus who found these questions because I am curious. Does any of this affect me?
No, medical campus faculty have 12 month appointments, and already have a payroll year and a fiscal year that both start on July 1, so they are unaffected by this new alignment.
Lump Sum Payment Questions
Who gets a one-time lump sum payment?
All faculty and instructional staff who have 9-month academic year salaries that have been paid out over 12 months (which is most regular full-time faculty, lecturers and instructors, and a few part-time faculty, lecturers and instructors), and who are continuing for the next academic year, should expect this one-time lump sum payment.
How much is it?
It is the amount you have accrued for the current academic year 2010-2011. For most faculty this will be 2 month’s worth of salary – what you would have received in July and August 2011 under the prior payroll year.
When will we get the payment?
By close of business on July 22. It will be a separate payment from your normal July salary payment.
Will the payment come by direct deposit or a paper check?
If you receive your normal salary by direct deposit, the lump sum will also come by direct deposit. If you normally receive your salary by paper check, the lump sum will be a paper check, delivered the same way you receive normal salary.
Where does this money come from?
You’ve earned it! Each month from September 2010 through May 2011 (the 9-month academic year), you earned 1/9th of your 9-month academic year salary. But if you, like most faculty, normally receive 12 equal monthly salary payments, the difference between the 1/9th you earned and the 1/12th you were paid each month has been set aside every year in order to provide you with a salary payment in June, July and August. Because we are moving the start of the payroll year from September to July, we need to distribute the salary that was set aside for you for the upcoming July and August, that you earned this past academic year. That’s the lump sum payment. It only needs to happen once, in order to move continuing faculty to the July 1 start of the payroll year.
What about taxes, and withholding?
You will pay taxes on the lump sum payment, since it is income. The payment will have taxes withheld (income taxes, FICA, Medicare).
Will other normal deductions be made from the lump sum payment, like medical insurance, dental insurance, parking, and FitRec fees?
No, because these deductions are all for monthly or annual services – they are not tied to income. The lump sum payment does not interrupt the normal monthly salary payments, so you will still have 12 of those in the year, from which deductions will be made for monthly expenses. Your first salary payment for the upcoming academic year (2011-2012) will occur at the end of July, 2011.
What about retirement contributions related to the lump sum payment?
Both the employee and employer will make normal contributions to retirement plans because these are tied to income.
Who won’t get a lump sum payment?
A faculty member or member of the instructional staff who has not been receiving 1/12th of his or her 9-month academic year salary each month should not expect a lump sum payment. If a faculty member is retiring as of August 31, 2011, or has been notified that he or she will not be re-appointed for the 2011-2012 academic year, he or she will not receive a lump sum payment, but will receive regular salary (and benefits) through the end of August.
Academic Year Questions
Does moving the start of the faculty payroll year affect the timing of the academic year for faculty?
No, the 9-month faculty academic year still runs from September 1 through May 31.
Doesn’t the academic year end when classes are over?
Not for faculty. The 9-month faculty academic year runs September 1 through May 31. It is not tied to classes, exams, grade deadlines or commencement.
What about semesters? When do they start and end?
The Fall semester for faculty runs from September 1 through January 15. The Spring semester for faculty runs from January 16 through May 31. Note that this is different from what students call semesters, which are more closely tied to the teaching schedule.
Will we still get raises in September?
Yes, the effective date of faculty merit increases will be September 1. Raises will first appear in the September salary payments, as they always have.
But the payroll year starts in July, shouldn’t raises start in July? One of the advantages of SAP (the new business software) is that it can adjust accounting retroactively. That means that we can make new salaries effective in September, keep the whole merit review/raise cycle unchanged, and use SAP to adjust accounting back to July 1. It was not practical to move the merit review cycle 3 months earlier, and if raises were effective on July 1, those who receive salary in the summer from grants and contracts would not know how much to budget until midway through the summer.
Will I lose money if my raise is not effective until September, but the payroll year starts in July?
No. SAP allows us to provide 3 month’s worth of raise in the September salary payment: the amount for September plus the amount that would have been in the July and August salary payments. Then from October through June each salary payment will simply be 1/12th of the new salary.
Appointment, Non-Reappointment, Retirement, and Resignation Questions
I’ve heard that moving the payroll year means we are moving appointment dates too. What’s happening?
Most new faculty appointments will start on July 1, so that the appointment year and the payroll year match from the outset. As faculty on contracts are re-appointed, the new start date will become July 1, and the new end date will be June 30. Over time, all current, continuing faculty will be moved to these dates as their re-appointments occur.
Does a July 1 appointment date have advantages for new faculty?
Yes, it does. The new faculty member becomes eligible for benefits as of July, he or she receives the first salary payment at the end of July (instead of having to wait until the end of September) and he or she can become acclimated and integrated in the university well before the start of classes in September.
Does it mean the new faculty member is expected to be working here full-time 2 months before the academic year starts?
No, the payroll year will start in July, but faculty with 9-month academic year salaries usually have duties that are tied to the academic year, which still starts in September. There may be prep work that a faculty member needs to do in order to hit the ground running on the first day of class, but aside from signing up for benefits and completing paperwork like an I-9 form, most new faculty will have few duties between July and the first of September. Likewise, continuing faculty should not see a change in duties over the summer because of the change in the start of the payroll year. This is an accounting change.
Right now I have a contract through August 31 in some future year. If I leave the University then, or I don’t get re-appointed, what happens?
Because you are a continuing faculty member this year, you will get the lump sum payment this July, like all other continuing faculty, and the University will honor your eligibility for benefits through the end of your contract in a future year. That means that in your last year, you should expect your final salary payment on June 30 (because you have transitioned to the July 1 start of the payroll year in 2011), but you will be able to continue your health insurance and other benefits not tied to salary through your end date. You will pay your contribution for these benefits directly, and the University will make its contribution too.
What if I have a retirement agreement in place for next year (August 31, 2012)? Do I get the lump sum payment this year?
Because you are a continuing faculty member this year, you will get the lump sum payment this July, like all other continuing faculty, and the University will honor your eligibility for benefits through your retirement date. In 2012 your last salary payment will be on June 30, and you will be given the option to continue your monthly benefits not tied to salary (i.e. health insurance, FitRec, parking, etc.) through your end date by direct billing for your contribution. Our Human Resources department will be in touch with you in Spring 2012 to discuss your plans.
What happens if I decide to resign partway through the year?
Your payroll situation will depend on when your last day is. Please be aware that it is much simpler to leave at the end of a semester (Jan. 15 or May 31). Please talk with the payroll person in your unit well in advance of your resignation date. If you leave in the Fall semester (before January 15) you will probably owe the University some or all of the money you were paid in July and August, since that was “pre-payment” for the academic year. If you leave in the Spring, before June 30, it is likely that the University will owe you money. This information will be part of all appointment and reappointment letters in the future.
I have more questions, whom can I ask?
For payroll and lump sum distribution questions, please contact the payroll person in your Dean’s office. For appointment questions please contact the faculty actions administrator in your unit. The list of payroll contacts and faculty actions contacts for each school or college may be viewed here. If one of these people can’t help you, please contact Julie Sandell, Associate Provost for Faculty Affairs in the Provost’s Office.