Top Education Payroll Challenges and How to Overcome Them

Payroll in K-12 education is a highly complex balance of managing a wide variety of variables influencing every paycheck. 

Education is highly regulated, typically hires union members, has complex salary grids, and so much more — and each of these variables must be navigated appropriately to avoid serious issues.

It’s no surprise school districts need the right Human Resources and Payroll (HRP) purpose-built for their industry. Otherwise, it can be difficult to tackle some of the unique challenges with a general-purpose HRP platform.

Accounting software designed for general business use often lacks the features required by educational institutions. It’s crucial for educators to use accounting software designed specifically for K-12 needs.

Additionally, as a K-12 leader, enhancing operational and administrative efficiency remains a top priority. Having the right tools and processes in place that improve accuracy and productivity is crucial for improving operational efficiency.

Yet, the complex and challenging nature of K-12 payroll is often a significant barrier to enhanced productivity and operational efficiency. Keep reading to learn more about the common payroll challenges in education and how using an education-focused HRP platform tackles them head-on.

Absence Management Integrated Workflow Between HR and Payroll

A significant challenge facing administrators is coordinating absences, starting when the employee enters an absence to the final sign-off by HR and payroll. Absence banks, such as available sick time or short-term disability, must be updated by both HR and payroll at different stages. Additionally, government regulations and union requirements make this process more complex than other industries.

All workflows related to absences must be integrated across all aspects of payroll and human resources to ensure compliance with all applicable regulations and agreements. 

This process typically begins with absence and timesheet tracking. It typically starts with a secretary or another school admin completing an absence entry for an absent teacher and includes who is covering the absent teacher.

Timesheets and absence management go hand in hand. Yet, different schools may use different systems for timesheets, such as ATE, EasyConnect, or SmartFind Express. An employee will enter the absence in their chosen system, which HR and payroll must then sign off on. 

Absence banks need to be manually updated without the right tools, and any resulting wage adjustments need to be calculated individually. Both of these methods are time-consuming and error-prone.

So what can an education-focused HRP software do to help? The system will be able to auto-update absence banks, including any payroll adjustments. 

For example, this could include a scenario with a Reduced Pay sick leave plan with a 10% wage deduction after the employee runs out of 100% paid sick leave — something that happens all across Canada. Additionally, multi-tier approvals can be configured for specific needs.

Timesheets for Groups Not Included in Absence Management

Not every employee group is included in a school district’s absence management system. Some districts may leave non-unionized staff to HR while in-class staff may be handled by the call-out system. Regardless of how a district handles this, these employees must be able to submit timesheets, receive pay stubs, and be sent T4s.

An ideal HRP platform will be capable of handling each of these tasks with minimal manual input from admins. Edsembli allows HR and payroll to create custom employee groups with collective agreements that apply to every individual employee assigned to the group.

You can set up multiple, customized employee groups to handle the plethora of contract differences. Here are just a few of the many employee classifications our platform can handle:

• Permanent EAs and ECEs
• Teachers in a teacher’s federation
• Non-unionized staff
• Admins, custodians, and back-office staff
• Casual employees and substitute teachers
• And other specialized groups like temp staff, interim principals, and more

Once these groups are created, employees can be added to the same timesheet management rules. This capability makes matching collective agreements for absence management and timesheet much easier than legacy options.

HR and Payroll Requirements of Collective Agreements

Collective agreements from unions and other groups create significant complexities that HR and payroll must navigate. These agreements each specify different terms for employment, such as:

• Union-specific shift premiums
• Severance agreements
• Sick leave banks
• Start and end dates
• Absence rollover at the end of the year (group-specific absence control)
• Vacation time carry over

Every specific collective agreement will have different p

arameters for these terms. For example, a custodian may have different shift premiums when working late shifts or covering for the head custodian.

It’s crucial that HR and payroll properly handle the varying pay types, pay frequencies, union dues, and contracts. When handled manually, it can be significantly time-consuming and prone to errors. Fortunately, a system like Edsembli can make staying on top of each agreement much more manageable, from next year’s staffing projections to hire to termination and year-end.

Contract Management Processes

It’s no secret that contract management is complex. Each contract’s terms and conditions must be considered when it comes to HR and payroll, and that’s no simple feat.

Your chosen HRP software must accommodate several different types of employment contracts:

• Salaried (permanent teachers)
• Occasional teachers or supply teachers
• Hourly grids for for permanent or temp contracts for non-salaried employees
• Timesheet paid staff
• Daily supply teachers
• Other groups

Additionally, there are specific types of employment contracts for the above roles that introduce further complexity and more possibilities:

• Permanent
• Casual
• Temp (as needed)
• Term contract (fixed)

With so many variables, it’s important to project and plan for the next year when it comes to hiring decisions. Given this, you should be able to answer the following:

• How can you make sure you don’t exceed your budget? 
• How much salary liability do you have for the following year? 
• How many Full-Time Equivalents (FTEs) will be on board?
• Can you combine any staffing requirements to be more efficient?

You need a system designed to answer these challenges to ensure you properly balance available budgets. Edsembli’s HRP and FIN solutions include a Budgeting module for finance and a Contract Negotiation System for both HR and finance to unify both HR and budgeting.

Additionally, once your employees are hired and contracts must be managed, Edsembli is ready to handle the complexity of managing these different contracts immediately. We can handle the following:

• All types of contracts and payroll
• Whether someone is daily, hourly, or salaried
• Implementing work schedules as related to contracts
• Absence banks per contract terms
• All types of payroll calendars
• Support for multiple pay frequencies and pay dates

Without the right software, managing all of these moving pieces can absorb significant work hours. Fortunately, you don’t need to handle these processes manually anymore.

Complex Salary and Allowance Grids

Salaries in other industries are often relatively straightforward, unregulated, and the employer can usually set them per employee at their discretion. However, this level of discretion isn’t usually the education case, as government regulations and union requirements create a complex salary structure that must be managed flawlessly.

Every educator will have a base salary. Then, based on qualifications, an additional allowance may be available. This allowance can take the form of additional pay or more vacation time, depending on the agreements.

Yet, allowances have a wide range of variance, which may include:

• Several tiers of allowances are based on qualifications and seniorities, like A, B, C, D. If A is the lowest, someone hired with a Ph.D. may start at D, while someone with a Bachelor’s Degree may start at A.
• Additionally, there may also be grid steps within the field, often on a scale of 1-10. Depending on the situation, there may even be decimal steps like 1.2, 1.3, etc. These grid steps are based on how much a specific qualification may be worth.
• To further complicate the situation, union and non-union agreements might use salary and allowance grids, but the specific implementation and available allowances may differ.

It’s pretty easy to see how managing this complexity with spreadsheets or disconnected systems can absorb significant amounts of time while also being prone to miscalculations. Using a purpose-built HRP like Esembli lets you configure salary and allowance grids once, then they’ll automatically be applied and calculated per employee.

Reporting Requirements for Internal and External Audits

Public education is regulated by government agencies, which includes audits and reporting to prove your school district is in full compliance. Generating necessary reports or making information available to an auditor can be significantly time-consuming and confusing with the wrong tools in place. 

Conversely, an HRP platform will already have the tools necessary to generate compliance reports, grant new users access to information, and have available audit trails to review.

Edsembli’s reporting tools make creating detailed reports to meet government-mandated audits and reporting easy, including comprehensive audit trails.

Insufficient Audit Trail and Permissions

An audit trail records any changes made to sensitive data within HRP software (and other critical IT tools). The goal of an audit trail is always to understand which user made which change.

Internal and external government-mandated audits will significantly benefit from audit trails to prove ownership over specific changes. For example, who made that change if an educator’s salary was increased? When was that change made?

A common issue for some legacy accounting systems is the lack of an audit trail and the lack of permission management. If a temporary employee is doing data entry, they don’t need the same user access level as the HR manager.

An ideal HRP platform provides robust, searchable audit trails in addition to customizable user access permissions. An auditor can easily identify who made any specific changes, and you’ll prevent unauthorized changes from occurring in the first place.

Struggling to Handle Salary Changes

Salaries will often change throughout an employee’s time at the educational institution. It’s crucial to properly manage any salary changes to ensure everyone is paid correctly, in addition to having the right benefits available.

Unlike general-purpose software, Edsembli can adapt to any retroactive, current, or future changes to compensation. We can also handle the calculations in pay based on each type of contract, changes to contract terms, and promotions.

Processing Reconciliation Payouts or True Outs

Reconciliation payouts, also known as true up payments, are unique to education. Educators don’t always teach for the entire school year, but will still must be paid out summer pay. 

It’s not uncommon for salaried employees to start mid-year or to retire, terminate, or change roles during the school year. And yet, these contract changes must be accounted for through the “true up” or “reconciliation” process to start the employee or pay out the rest of the contract. 

Many school districts pay a salaried teacher’s compensation over 10 months to provide employment income over the in-class school year, but the teacher’s contract is usually over 12 months. Collective Agreements may require the employee to be paid over 10 months instead of 12, making that final June pay a higher percentage of salary paying out the rest of the salary (often referred to as the “summer pay”).

For example: let’s say there are 194 days in class for the given school year and the salaried employee is paid monthly over 10 months but paid 1/12 of their salary per month. By the end of May, the employee has been paid 9 months of salary. By the end of June, they need to be paid 3 more months worth to pay out the rest of the employee’s salary.

What happens if the teacher starts later in the year? Or stops teaching before the end of the school year? The same process needs to be followed, calculating and paying out the remaining agreed-upon salary or starting the employee where they need to be when they start mid-year. 

To make matters even more complex, if someone is promoted at any point, the salary reconciliation process needs to be reconciled with the new salary.

Fortunately, Edsembli handles every step of salary reconciliation right out of the box since our platform is designed for educational institutions. There’s no need to rely on time-intensive manual processes — our platform just needs to know the specific parameters of your agreements and takes it from there.

How Edsembli Solves These Challenges

HR and Payroll in other industries certainly have their own challenges, but education is subject to government regulations, collective agreements, and union requirements. These unique influencing factors create the need for an HRP platform with a focus on the unique needs of educational institutions.

Edsembli is an industry leader in HRP software designed to tackle the unique challenges faced by K-12 education. Let’s quickly recap some of the ways our purpose-built platform is ready for these challenges:

• Handling hire to payroll to year-end all in the same system and interconnected processes.
• Adaptive payroll changes
• Simpler contract management processes
• Customizable employee groups to handle different contracts, high turnover, role changes, and collective agreements
• Simplified reporting for internal and external audits
• Configurable salary and allowance grids
• Process payouts and salary reconciliations right out of the box

We make sure everyone is paid on time and pension, benefits, payroll, and HR are accurately managed, all without requiring HR and payroll departments to address these challenges manually.

Are you ready to discover how Edsembli can streamline your Human Resources and account to improve operational efficiency? Contact us today to speak with an HRP expert to see how Edsembli’s education-focused ERP can transform your organizational processes from HR to the student experience.