To align with industry standards and best practices, beginning Oct. 1, Iowa State's merit, contract and professional and scientific (P&S) employees and postdoctoral scholars in salary nonexempt positions will change to hourly compensation and be paid twice a month.
Employees' compensation is not changing. Their current annual salaries will show up as an hourly rate in Workday, but their bottom-line pay is not impacted.
The change creates a consistent payment schedule for all nonexempt employees at Iowa State -- salary nonexempt and hourly nonexempt. Both designations require that employees are paid for hours worked exceeding 40 hours per week at one-and-one-half times their regular pay rate. The federal Department of Labor sets guidelines for nonexempt positions, and staff in ISU's general counsel and university human resources offices apply them to university positions.
FAQ:
Salary nonexempt transition to semimonthly pay schedule
"This change will benefit employees by increasing transparency of their paychecks. There will be a clear understanding of their earnings based on the hours they work," said payroll senior manager Teri Kruse. "In addition, the increased pay frequency can lead to more effective budgeting, which enhances financial stability."
As of this month, the change impacts 924 employees paid as salary nonexempt (493 merit, 421 P&S and four contract employees, and six postdoctoral scholars).
Why the greater frequency?
The change builds in additional transparency and efficiency to the payroll process:
- Employees will be paid for actual time they've worked, rather than for days yet to be worked. There will be a direct link between hours worked and their paycheck.
- For ISU's payroll team, the change streamlines the payroll process and reduces time and cost of processing off-cycle overtime checks.
Catch-up check in October
The transition from a monthly to semimonthly pay cycle creates a two-week lag in pay. To assure their 2024 salaries aren't diminished due to this lag, impacted employees will receive a one-time transition payment on Oct. 31, distributed the same as payroll checks.
When semimonthly pay is fully implemented in November, nonexempt employees will be paid twice a month for actual hours worked during two pay periods: Days 1-15 of the month and days 16-last day of month. Illustration of transition.
Impacted employees, their supervisors and administrative officers received emails about this change from university human resources leaders last week. Questions about this change may be emailed to semimonthly@iastate.edu.
