Alaska state payroll jobs go unfilled, causing problems for other workers

The state has a payroll problem.

According to the Alaska Beacon, almost half of state payroll processing jobs are unfilled, causing some state employees’ paychecks to be delayed or even short of what they should’ve been paid.

The problems were highlighted in a letter this month from Gov. Mike Dunleavy’s chief of staff, Tyson Gallagher, to the commissioners of state departments, in which Gallagher blamed “excessively high vacancy rates” in the Payroll Division.

Alaska Beacon reporter James Brooks says there are so few employees doing payroll, state departments have had to put a pause on letters of agreement, which can include bonuses for new hires. In fact, Brooks says, there are so many problems piling up, the Payroll Division can’t even keep track of how many reports of problems they’ve received.

Listen:

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The following transcript has been lightly edited for clarity.

James Brooks: In some cases, it’s maybe $50, $60 (missing from a paycheck). But there’s cases where people are missing hundreds of dollars, even thousands, and other cases where employees went weeks without being paid. And that, in turn, is contributing to turnover elsewhere in the state. The state’s already been struggling to hire and retain employees. And this appears to be exacerbating the problem, not just in the payroll department, but in all state agencies.

Casey Grove: Wow, yeah, I hadn’t thought about that. But the fact that there would be problems in the payroll department, in terms of staffing, then leads to problems elsewhere, with people wanting to leave because they’re not getting paid on time, or enough, or whatever.

JB: Exactly. I talked with Jordan Adams, who is the business manager for Local 71 here in Alaska. And he said that in some cases, the state has hired new transportation workers who didn’t get paid for six weeks. And he told me that’s absolutely unacceptable, and that the state is already having problems finding and hiring new workers. But when they’re not getting paid, they simply get up and leave, and the state has to hire again.

CG: So why is that? I mean, is it akin to other problems that employers are having hiring people? Or is there something else going on?

JB: There’s a lot of possible reasons. But the one that came out in my reporting was that the state appears to be paying uncompetitive wages for the jobs it’s asking workers to do. For example, during my reporting, I found that the state is preparing to hire a contractor to provide temporary help for payroll, and the state is going to end up paying that contracting firm more than double what it pays an employee on staff. Now, all that money won’t go to the hired contract employee. The contracting firm will take some of that, but it’s a pretty significant sign that people can make a lot more money in private industry and in other state governments than they can in Alaska. And so the state is having a hard time hiring employees.

CG: And then, of course, in in the case of the state payroll employees, they’re represented by a particular union, and the the union isn’t happy about this situation, right? I mean, what did they have to say?

JB: Yeah, the union business manager, Jeff Kasper, was pretty frank. When he was talking with me, he said that this is a problem of management, that managers, executives in the state, have not been doing enough to increase wages and benefits to stay competitive. He and a lot of other unions have been clamoring for the restoration of a state pension program. That’s been historically one of the big advantages the state has offered. But since the early 2000s, the state hasn’t offered a pension. And as long-service employees retire, the state has been replacing them with employees who don’t have pensions. And so there’s much less of an incentive for new employees to stay with the state.

CG: Now, the plan in the short term, like you said, is to contract out the services. But the union doesn’t see that maybe as such a temporary thing, right?

JB: Right. Kasper, when he was talking to me, said he believes it’s part of a deliberate, long-term plan to outsource permanently. And while evidence for that is pretty short on hand right now, it’s been a concern for a long time. The state is, as part of the letters of agreement, waiving the requirement that Alaska state employees work inside the state. And the public employee unions have been growing increasingly alarmed over the past few years about the prospect that remote work might allow the state to have a large number of employees who don’t actually work in Alaska. And the Department of Administration, which manages payroll, has said that this is only a temporary fix. They intend to fill these positions inside the state. They are stepping up, they’re hiring, they’re offering more bonuses. If you go on Workplace Alaska right now, the job listings say that you can have a hiring bonus of $1,000 to $3,000 for a job in the payroll department.

CG: Except they can’t process the bonus.

JB: I think they’d be able to get that done. And the department is also bringing in former payroll workers, people who used to work in the payroll department and are now working other state jobs. They’re asking them to temporarily do payroll work instead of what they normally do.