Biweekly Pay Communications Toolkit

Stakeholders & Audiences

• Controllers 

• HR Directors & Professionals

• Payroll Professionals 

• EDs & DDs 

• Employees

Tools

• Key Messages 

• Talking points 

• Executive Letter

• Newsletter Story 

• FAQs

Key Messages

Beginning July 2023, and in accordance with State Fiscal Rule 9.3 and the Colorado WINS Partnership Agreement, all current Agency Employees paid on a monthly pay cycle shall have the choice to be paid on a biweekly pay cycle. An employee’s choice to move from a Monthly Payroll Cycle to a Biweekly Lag Payroll Cycle is a one-way choice, meaning that the employee cannot request to move back to a Monthly Payroll Cycle. 

All new hires and employees who are returning to the State are hired onto the biweekly pay cycle with a two-week lag. The two-week lag means that an employee performs services during a two-week period and is subsequently paid for such services on the next pay date. The employee is paid on Friday every other week, totaling 26 in a calendar year. 

This is consistent with best practice, simplifies the payroll process, and enables the State to continue to comply with federal timekeeping reporting requirements.

What does this mean for employees who choose to be paid biweekly? 

Employees will continue to earn the same amount. The payment of their annual salary will be done over 26 pay periods rather than the 12 pay periods currently. If employees choose to transition to biweekly play, the transition will cause a delay in employees’ pay, depending on the transition date to move from monthly to biweekly pay.

Agencies can start offering a transition to biweekly pay to their employees before July 1, 2023. All agencies will need to offer biweekly pay starting July 1, 2023.

Each agency shall develop a timeline for the time between when an employee submits a request to move to Biweekly Lag Payroll and the time of the beginning of the pay period that the employee will be paid on a Biweekly Lag Payroll Cycle. 

Considerations for Determining the Overall and Pay Period Timelines include the following: 

• The agency’s capabilities to administer the requests 

• Staffing and workload considerations 

• Budgetary implications including over expenditures

Each agency’s executive director shall approve the Overall and Pay Period timelines after considering the above-mentioned factors and consulting with the agency controller, budget director, HR director, and labor relations team. 

The timeline must be reasonable. 

All new hires shall be set up on a Biweekly Lag Payroll Cycle.

Information and FAQs are available on the Office of the State Controller website. Questions should be directed to each Department Controller. 

Talking Points

The State is adjusting many of its business models to align with best business practices. Beginning July 2023, in accordance with State Fiscal Rule 9.3 and the Colorado WINS Partnership Agreement (Article 32.5), all current State employees paid on a monthly pay cycle shall have the choice to be paid on a biweekly pay cycle.

An employee’s choice to move from a Monthly Payroll Cycle to a Biweekly Lag Payroll Cycle is a one-way choice, meaning that the employee cannot request to move back to a Monthly Payroll Cycle. 

All new hires and employees who are returning to the State are hired onto the biweekly pay cycle with a two-week lag. The two-week lag means that an employee performs services during a two-week period and is subsequently paid for such services on the next pay date. The employee is paid on Friday every other week, totaling 26 in a calendar year. 

With lag pay, an employee receives a paycheck for work already performed, including overtime. Currently, an employee is paid based on the number of expected hours that the employee is projected to work. When projected hours do not match actual hours, adjustments to the employee’s next paycheck must be made manually. 

Employees’ paychecks will be more reliable, significantly reducing the potential for adjustments.

Employees will receive overtime and shift differential compensation more promptly and in the same pay period worked, rather than waiting more than one month. 

Employees’ annual or hourly pay will not change. Annual pay will be divided over 26 biweekly pay periods instead of 12 monthly pay periods. Employees will be paid every two weeks. Employees will receive checks two weeks after the end of the pay period. Employees already on a biweekly pay schedule will be unaffected.

Employees who choose to remain on the monthly pay cycle will continue to receive their full June pay on July 2 (i.e. “pay date shift”). Employees who choose to change to the biweekly pay cycle will be paid every other week. The pay date shift does not apply to employees paid biweekly. 

The Office of the State Controller will develop guidance for employees who work at an agency that will not have a time & leave system in place by July 2023. 

Draft Executive Letter to Agency Employees 

Headline: Biweekly pay available to all employees in July 

Dear [Agency] employees,

We want to inform you about a new opportunity to choose how you receive your paycheck.

In order to align with Federal timekeeping requirements and best practice for both public and private sectors, beginning July 2023, employees paid on a monthly pay cycle shall have the choice to be paid on a biweekly pay cycle. This change is in accordance with State Fiscal Rule 9.3 and the Colorado WINS Partnership Agreement (Article 32.5). 

Biweekly pay aligns the State’s payroll processes with best practices, improves accounting, and ensures your paychecks are accurate.

Employees who are newly entering State employment will be paid biweekly. Current employees who accept a new position within the State may be put on a biweekly pay cycle, with the exception of Employees on a schedule subject to Section 7(k) of the FLSA.

Biweekly pay will ensure that your paychecks will be more reliable, significantly reducing the potential for adjustments. With monthly current pay, the State pays employees based on anticipated working hours and adjustments are needed if actual hours differ from anticipated hours. With biweekly lag pay, payroll personnel has the opportunity to ensure your checks are accurate based on the hours you have worked. 

Employees will receive overtime and shift differential compensation more promptly and in the same pay period worked, rather than waiting more than one month.

It is important to note that any choice to move from a Monthly Payroll Cycle to a Biweekly Lag Payroll Cycle is a one-way choice, meaning that the employee cannot request to move back to a Monthly Payroll Cycle. 

Information and FAQs are available at the end of this information. Questions should be directed to your Department’s Controller. 

Draft Newsletter Language

Headline: Employees paid monthly have opportunity to move to biweekly pay 

Effective July 1, 2023, State Fiscal Rule 9.3 allows existing employees paid on a monthly basis to select biweekly pay. Additionally, employees new or returning to state employment will be paid on a biweekly basis unless the employee is on a schedule subject to Section 7(k) of the FLSA. These changes are consistent with the current Partnership Agreement with Colorado WINS. 

Biweekly pay is consistent with best practice, simplifies the payroll process, and enables the State to continue to comply with federal timekeeping reporting requirements. It also improves accuracy, reliability, and timeliness of employee pay. As well, employees who receive overtime and shift differential compensation will receive their pay more promptly 

Employees’ annual or hourly pay will not change if they choose to move to biweekly. Annual pay will be divided over 26 biweekly pay periods instead of 12 monthly pay periods. Employees will be paid every two weeks. Employees will receive checks two weeks after the end of the pay period. Employees already on a biweekly pay schedule will be unaffected. 

It is important to note that, if an employee who is paid monthly and chooses to move to biweekly pay, there will generally be a week delay in their first paycheck, depending on the transition date. Employees who are currently paid biweekly will be unaffected.

“The State benefits from a modernized process that will improve the efficiency and accuracy of payroll, including reduced processing times and more reliable payroll based on actual time worked,” said Colorado State Controller, Robert Jaros. “This change results in a significantly reduced number of after-the-fact adjustments.” 

FAQ’s 

General Information 

How are state employees paid now?

The State of Colorado has two ways to pay employees through the state payroll system - biweekly lag pay and monthly current pay.

What are the most recent changes regarding biweekly pay?

Effective July 1, 2023, State Fiscal Rule 9.3 allows existing employees paid on a monthly basis to select biweekly pay. Additionally, employees new or returning to state employment will be paid on a biweekly basis unless the employee is on a schedule subject to Section 7(k) of the FLSA. These changes are consistent with Article 32.5 of the Partnership Agreement.

 What is lag pay versus current pay?

With lag pay, an employee receives a paycheck for work already performed, including premium (overtime, shift and/or pay differential) pay. With pay current, an employee is paid based on the number of expected hours that the employee is projected to work. If overtime, shift differentials and/or LWOP occurs during the month, it is not reflected in that month’s paycheck and then is manually entered on the next payroll. All new hires and employees who are returning to the state are hired onto the biweekly pay cycle with a two-week lag. The two-week lag means that an employee performs services during a two-week period and is subsequently paid for such services on the next pay date. The employee is paid on Friday every other week, totaling 26 in a calendar year. With the most recent changes, employees will have a choice between biweekly or monthly pay. 

What are the advantages to employees on biweekly lag pay?

 Advantages to employees on biweekly pay include:

• More frequent pay periods (from 12 to 26 a year), giving these employees extra flexibility in their personal cash flow.

• These employees will be paid consistently every other Friday. 

• The potential for having to pay the State back for after-the-fact adjustments, such as LWOP, will be significantly reduced.

• Premium pay (overtime, shift, and/or pay differentials) will be paid on the next regularly scheduled payroll following the period the premium pay was earned, and fewer of these employees will have to wait an additional pay period to see the adjustments reflected in their pay.

How does the State benefit from the biweekly lag pay?

The State benefits from a modernized process that will improve the efficiency and accuracy of payroll, including reduced processing times and more reliable payroll based on actual time worked. This results in a significantly reduced number of after-the-fact adjustments. Completing timesheets with actual time worked prior to payroll processing will enable the State to continue to comply with federal timekeeping reporting requirements, federal wage and hour regulations, and the Affordable Care Act. This will improve labor allocation processes, shorten the monthly and annual financial closing cycle, give managers more timely information by which to manage their labor, avoid over-expenditures, and meet budgetary targets.

 How does the new biweekly lag pay policy affect new hires, rehires, break-in-service and transfers? 

 Biweekly lag pay affects employees (both classified and non-classified) in the following ways: 

• New Hires: all new hires will be placed into the biweekly lag pay cycle. 

• Rehires/Break-in-Service: employees who have left the state and are returning to DPA, regardless of the timeframe, will be placed into the biweekly lag pay cycle.

• Transfer (inter- or intra-agency): Employees transferring internally from another agency who are paid monthly may choose to have their pay continue on the same schedule or to move to a biweekly pay cycle. Agencies may have certain requirements regarding transfers. 

What is a pay period?

A pay period is the time included in an employee’s pay.

What is gross pay? Premium pay? Net pay? Take home pay? 

• Gross pay is wages before tax withholdings and other deductions are taken. 

• Premium pay is an added amount to gross pay and may include overtime, shift, or pay differentials.

• Net pay is gross pay less tax withholdings and deductions as shown on your pay stub. Tax withholdings include federal, state, and local taxes. Deductions may include but are not limited to PERA contributions, 401(k) contributions, health insurance premiums, flex spending account or HSA contributions, ECO pass, and parking. It is important to remember that additional direct deposits are also shown as deductions on your paycheck.

What is gross pay? Premium pay? Net pay? Take home pay? 

• Gross pay is wages before tax withholdings and other deductions are taken. 

• Premium pay is an added amount to gross pay and may include overtime, shift, or pay differentials.

• Net pay is gross pay less tax withholdings and deductions as shown on your pay stub. Tax withholdings include federal, state, and local taxes. Deductions may include but are not limited to PERA contributions, 401(k) contributions, health insurance premiums, flex spending account or HSA contributions, ECO pass, and parking. It is important to remember that additional direct deposits are also shown as deductions on your paycheck.

How does the new biweekly lag pay policy affect new hires, rehires, break-in-service and transfers? 

Biweekly lag pay affects employees (both classified and non-classified) in the following ways: 

• New Hires: all new hires will be placed into the biweekly lag pay cycle. 

• Rehires/Break-in-Service: employees who have left the state and are returning to DPA, regardless of the timeframe, will be placed into the biweekly lag pay cycle.

• Transfer (inter- or intra-agency): Employees transferring internally from another agency who are paid monthly may choose to have their pay continue on the same schedule or to move to a biweekly pay cycle. Agencies may have certain requirements regarding transfers. 

What is a pay period?

A pay period is the time included in an employee’s pay.

What is gross pay? Premium pay? Net pay? Take home pay? 

• Gross pay is wages before tax withholdings and other deductions are taken. 

• Premium pay is an added amount to gross pay and may include overtime, shift, or pay differentials.

• Net pay is gross pay less tax withholdings and deductions as shown on your pay stub. Tax withholdings include federal, state, and local taxes. Deductions may include but are not limited to PERA contributions, 401(k) contributions, health insurance premiums, flex spending account or HSA contributions, ECO pass, and parking. It is important to remember that additional direct deposits are also shown as deductions on your paycheck.

Exempt, Non-exempt & Employee Schedules

Will exempt and non-exempt employees on biweekly lag pay be set up as exception pay? 

Exempt employees paid through the CPPS system should be set up as “exception pay”, meaning they will only be required to indicate time not worked (e.g. annual leave, sick leave, holiday, etc.). Non-exempt employees paid through the CPPS system and paid on a biweekly basis should be set up as “positive pay” meaning they are paid based on actual work hours captured through Kronos or other time keeping system.

Is it necessary to change employee work schedules if they transition to biweekly lag pay? 

The best practice is to align your employee’s work schedules with the pay cycle so employees are better able to recognize the hours worked in their work schedule aligned with the pay period.

 Will agencies be able to continue with flex schedules with biweekly lag pay?

For exempt employees, you can continue flex schedules with biweekly lag pay. For non-exempt employees, it is recommended to only provide a flex schedule that equals 40 hours per the FLSA work week (e.g. 4-10 hour days). Otherwise, there may be the need to pay overtime.

Recruitment of New Employees 

How is pay communicated to new employees on biweekly lag pay?

Exempt employees will be provided with a biweekly amount and approximate annual amount during the offer. Non-exempt employees will be provided with an hourly rate of pay. Hiring Managers should work with their Budget office on the rate of pay and any budget implications. Specific information needs to be included in the offer letters and Hiring Managers should work closely with HR to ensure the correct information is communicated during the offer.

Should job postings reflect how employees will be paid? 

At the time of posting, it is not known whether the position will be filled by someone who will be paid monthly (internal, monthly-paid state employee ) or biweekly (external hire). Job postings for all positions will list the salary information as monthly and biweekly.

How should leaders respond to questions from candidates regarding the difference between the range listed on job postings and the pay communicated during the offer?

Job postings publish the range of pay aligned with the position and the Division’s budget. This range establishes the lowest and highest amount that could be included in an offer. The rate being provided during an offer of employment is offered within the posted range and adjusted to align with the appropriate pay cycle (see General Information section above).

For Example:Job Posting Range: $4,000 - $8,000 monthly

Offer Rate: $2,500 per biweekly pay period 

In the above example, the offer rate is within the published range and communicates pay information based on the biweekly pay cycle.

When making a verbal offer, how does a leader explain the difference in pay cycles for employees of DPA.

When making an offer of employment, a hiring manager could use the following language to help explain the difference between the monthly and biweekly pay cycles for employees. This does not take the place of other important information to be shared during the offer process, it is only related to biweekly pay.

You will be paid on a biweekly basis and your pay will reflect work performed two weeks in arrears. In the past we have had one, monthly pay cycle and employees were paid on the last business day of the month. As we have evaluated ways to streamline and bring efficiencies to the pay process we implemented a biweekly pay cycle and are hiring all new employees onto this cycle. As you interact with employees at DPA, you may hear of the monthly pay cycle so I wanted to provide you with this information to help alleviate any confusion that may come up based on the two different cycles.

Please note that the biweekly lag pay cycle is used by almost all employers and prospective employees should be familiar with a biweekly pay cycle.

 When a new hire first starts working, when would they expect their first paycheck?

The payroll processing calendar outlines pay periods and the corresponding pay dates. Employees will be paid on the pay date that applies to the pay period they hire into.

For Example: The information below lists a pay period and the corresponding pay date. An employee who starts work on 11/4/23 starts in the middle of the pay period and would be paid for time worked from 11/4/23 - 11/8/23 on 11/22/23.

Pay Period: 10/26/23 - 11/08/23

Pay Date: 11/22/23

Current Employees

Will current employees on monthly current pay have the option to “opt-in” to the biweekly lag pay cycle if they choose to?

 Yes, beginning July 2023, State agencies will make this option available to employees. Employees may also remain monthly.

How will supervisors know what employees are on a biweekly pay cycle or a monthly pay cycle?

 There is a report in the Human Resources Data Warehouse (HRDW) that each agency’s HR and payroll professionals can run and provide called “job listing detailed” that will reflect the pay cycle for their employees. It is the same report available today. Supervisors can contact HR for a list of employees and their pay cycles.

Leave Calculations

 Will leave accruals (annual leave, sick leave) still be on a monthly basis if an employee transitions to biweekly pay?

Yes, leave accruals will continue to be applied on a calendar monthly basis on the last day of the month and can be utilized beginning the following month.

How will comp time be accrued and when can it be used?

There is no change to comp time accrual and/or usage. Earned comp time is reflected and available for use in an employee’s balance the week after it is earned.

If a Non-Exempt employee works less than 40 hours as positive pay, will we prorate accruals? (Currently, we pro-rate accruals for exempt and non-exempt with LWOP)

Yes. Leave accruals are prorated based on paid hours, adjusted if applicable and credited on the last day of the month.

Benefits & Other Deductions

 Will all benefit deductions be split in half for employees who transition to biweekly pay?

 Please see the chart below for information regarding benefits and other deductions:

Deduction	Paycheck Frequency	Frequency per Year	Amount to be Keyed
PERA (mandatory)	Each Paycheck	26	-
PERA 401k, 457 (Percentage)	Each Paycheck	26	% From Form (401k)
Long Term Disability	Each Paycheck	26	-
Federal and State Taxes	Each Paycheck	26	-
COWINS	Each Paycheck	26	1.5% of base pay
FAMLI	Each Paycheck	26	.45% of wages (less Sect. 125)
Most Garnishments, Child Support, Bankruptcy	Each Paycheck	26	-
Additional Direct Deposits	Each Paycheck	26	$/% From Form
Health, Life, Dental Insurance	First Two Paychecks/Month	24	-
Flexible Spending Account	First Two Paychecks/Month	24	-
PERA 401k, 457 (Flat Dollar)	First Two Paychecks/Month	24	½ $ From Form (401k)
Parking	First Two Paychecks/Month	24	Instructions From DCA
EcoPass	First Two Paychecks/Month	24	½ $ From Form
Colorado Combined Campaign	First Two Paychecks/Month	24	½ $ From Form

Will benefit deductions be current in the month paid or lag two weeks? 

Benefit deductions will be current in the month they are paid. For instance, benefits for the month of January would be taken from the paychecks in January. 

How will benefit deductions work for a new hire?

Since new employees have 31 days to enroll in benefits from the time they become eligible, there could be instances where an employee’s enrollment has not been processed in time to be taken from the first paycheck in the first month of coverage. In these instances, employees will have double deductions taken from the next paycheck.

How will the final paycheck work for the benefit deduction?

 The termination of benefits will occur on the last day of the month in which the employee separates from state service; the deductions that occur within the month of separation will cover the premiums for that month.

Will benefit deductions be automatic or will it be administrative to track to ensure no over or under payment of benefits by employees?

Assuming there are no issues, deductions are automatic. As with most processes, there may be a need for manual corrections.

Systems & Processes

How will the pay date shift impact department budgets for biweekly employees?

Departments with biweekly employees funded by the General Fund will not be shifting those employees’ General Funded payroll expense to the next fiscal year in accordance with the Statute.

Because biweekly is not shifted, what will be the impact on budgets when a monthly paid employee leaves the state and a new biweekly employee is hired?

 Biweekly employees paid from the General Fund are not shifted and so when you replace a monthly paid employee who is shifted to a biweekly employee who is not shifted, the department will need to identify vacancy savings to fund the one month of non-shifted pay.

What will the payroll deadlines be for biweekly payroll?

The Payroll Deadline Schedule will continue to be communicated to leaders in the same manner it is today. Leaders will likely have both biweekly and monthly paid employees and will separate schedules relative to both. Leaders are accountable for ensuring employees submit timely and accurate timesheets as well as reviewing and submitting timesheet approvals by the stated deadlines.