Anchorage Settles Payroll Issue with City Firefighters for an Estimated $2 Million

The City of Anchorage, AK has settled an ongoing issue with city firefighters related to a mistake-ridden payroll software program that was part of a city-wide computer software upgrade that began in 2011. The city-wide software program initially came with a $10.6 million price tag however, that cost has sky-rocketed to an estimated $81 million over the past 8 years.

Payroll woes between the City of Anchorage and city employees began in September 2017 when the city unveiled the payroll portion of the massive city-wide software overhaul. According to the Anchorage Daily News, employees reported over 1,200 payroll errors in its first month of service. As of June 2018—approximately 10 months after launching the new payroll software—city officials estimated it had overpaid some employees a total $1.8 million while it underpaid other city employees approximately $2.8 million. City officials believe that the police and fire departments were the most impacted by the payroll errors partly due to the varying nature of their 24/7 work shifts.  

According to the Anchorage Daily News, many of the collective bargaining agreements (CBAs) between city workers and the city include monetary penalties in the event workers are shorted wages and not made whole in a timely fashion. For example, the terms of the CBA between the City of Anchorage and the International Association of Firefighters, IAFF Local 1264, includes a penalty of $50 “for each day after the next full pay cycle during which the error in pay remains uncorrected.”

Time went on as the city tried to rectify the pay issues. Some of the payroll issues remained unresolved for as long as 18 months. The penalties due under the CBA mounted as a result. In the end, firefighters estimated the city owed its 380 members approximately $5 million in monetary penalties as a result of unresolved payroll errors.  

The city believed paying all of the penalties to all city employees was just not financially possible. As a result, the firefighters have agreed to accept “non-cashable” paid leave worth approximately $2 million in-lieu of pursuing the monetary penalties allowable under the labor contract.

The highlights of the settlement are as follows:

• The city agreed to waive overpayments made to represented firefighters from September 2017 thru December 31, 2018.
• Firefighters that were underpaid would still receive all money owed.
• The city provided all 40-hour firefighters a total of 120 hours of non-cashable paid leave.
• The city provided all “Kelly Shift” firefighters a total of 216 hours of non-cashable paid leave.
• The city agreed to reimburse the union $40,000 for its legal fees associated with grievances and other legal costs associated with the payroll errors.

For more on the story from The Anchorage Daily News, click here.

Here is a copy of the settlement between the firefighters’ union and the city.