Los Angeles City officials Tuesday are advancing plans to improve the rollout of a new payroll system following issues where approximately 700 employees experienced both underpayments and overpayments.
Ted Ross, general manager of the city’s Information Technology Agency, told the council’s Personnel, Audits, and Hiring Committee that out of over 45,000 checks issued for the pay period ending July 10, about 700 employees in the Los Angeles Police Department needed emergency payments to rectify payment discrepancies.
The employees impacted were administrative positions and some dispatchers, according to city officials.
Project staff noted they worked closely with LAPD human resources to ensure a smooth process, but issues still happened due human error. Another big issue was that some individuals were on a work schedule that was not aligned with their role, and it needed to be adjusted in the new system.
The payroll upgrade project began in 2020 when the council at the time agreed to spend about $62.1 million for several contracts to migrate the city’s outdated, custom-built payroll computers known as PaySR to a new program developed by Workday.
The new system is intended to merge payroll and human resources data, according to city documents.
But the project has since then cost $112 million, according to the controller’s office.
During this current stage of the transition, the city is using a hybrid system, having data input through PaySr as well as Workday.
“Workday has a mechanism that PaySr does not have, which reconciles your schedules to your hours worked,” Ross said. “PaySR was more forgiving. It didn’t really care what your schedule in the system was, and it paid you for the work that was entered into your pay.”
Additionally, project staff noted that LAPD inputs employees’ hours into another system before it is then placed into Workday. Any issues with workers’ hours could not be addressed in time before checks were sent out, according to project staff. That was the issue for those 700 LAPD employees.
Project staff worked with City Controller Kenneth Mejia’s office and the General Services Department to make sure any discrepancies were addressed with the issuance of emergency checks.
But in doing so, another issue arose, the overpaying of LAPD employees, officials said.
Councilman Tim McOsker, who chairs the personnel committee, raised concerns over the under-and-over paying of employees. He expressed his frustration with the situation impacting those 700 employees. While the problems with underpayment were addressed, he noted that those workers could have run into issues paying rent, mortgage, car payments and other financial obligations.
He asked the project team about direct deposit, which they said will be established for this next pay period. Any emergency checks issued will be sent to employees’ bank accounts.
LAPD employees who were overpaid will receive paperwork they must sign off on, which would be an acknowledgement of overpayment. Employees would then agree to a repayment plan of excessive money in their recent paycheck.
McOsker expressed his frustration with the situation, but emphasized that if the city “overpays you, we’re going to collect our money back, and if we underpay you, we’re going to be held responsible under every code.”
The committee moved to continue their discussion to a future meeting, as a means to further receive updates of the ongoing payroll project.
The project officially called the Human Resources and Payroll Project is intended to replace the 22-year-old payroll system, necessitated due to the outdated technology prone to cybersecurity issues, according to a report filed by the Information Technology Agency in April.
City officials aimed to implement Workday at the end of December 2021, but given staffing shortages and other challenges caused by COVID-19, it was approved for a “phased rollout.”
Phase 1 of the project went live in May 2022 with hiring and onboarding serving as key features of the new system, but implementation of Phase 2 fell behind schedule with a target date for December 2023.
Phase 2, also known as Go-Live, was set for December 2023, adding tools to Workday related to absence management, benefits administration, compensation, time tracking, payroll, among other things. Again, due to complications, this part of the project was pushed back until June 2024.
Due to the complexity of the project and time needed to train city employees on how to use the system, multiple departments had raised concerns about readiness, according to city documents.
The report noted that the Go-Live was set for June 16, followed by a period of support through Sept. 13, where the entire payroll project team would monitor the new system, review and resolve issues, as well as provide phone and video conference help sessions.
Last year, the Los Angeles Protective Police League, the union representing LAPD’s rank-and-file sued the city for failure to timely pay salary raises, which the city approved as part of the new contract through 2027.
The transition from PaySR to Workday is unrelated to the lawsuit. The issues at the center of the LAPPL’s lawsuit were resolved six months ago, and all remaining retro pay was paid out then, according to city officials.
According to LAPPL, the lawsuit seeks to compel the city to pay prejudgment interest to LAPPL’s membership resulting from the six month delay in implementing salary raises which were to be effective July 16, 2023, under the contract. A trial date is set for Oct. 10.