Pay increases may seem straightforward on the surface. However, in education, things can get complex very quickly. In this article, IRIS Education discuss meeting the challenge of handling backdated pay
This autumn, many payroll teams will be working to handle backdated pay to 1 September 2024, following a government-approved recommendation from the School Teachers’ Review Body (STRB) to implement a 5.5% increase for teachers.
Of course, this is an example of a major development affecting all teaching staff at the same time. But teachers usually go up a pay scale every 2 years, and support staff experience something similar. Such pay rises often get approved in October or November as part of annual performance reviews, but they must be backdated to the start of September.
What might such developments mean for you as back-office staff managing payroll for your school or trust? In short, there will be a lot of work done and time spent ensuring no mistakes are made.
The Decision and Impact
In this recent example (at the time of writing), we are looking at a government-approved pay rise that could see the lowest salary for teachers outside London reach £31,650, while the highest (for leadership) could reach £138,265. As a result, £1.1 billion is being allocated to schools to cover costs, along with an additional £97 million for post-16 education.
However, even if you agree that the cost of this wide-reaching pay rise has been covered, the administrative challenges it presents are not something the government can alleviate for Multi-Academy Trusts (MATs) implementing the change. It also doesn’t help the increasing number of state schools that now have to manage their own payroll after councils ceased providing this service.
Backdated Pay Challenges
When pay rises are decided, they often take effect retroactively. This is because:
Government approval came after the start of the financial year (April) or the school year (September). As a result, schools need to recalculate the pay for each teacher from April or September, depending on when the decision was made, and which ‘year’ (financial or school) is relevant.
As part of the approval process, there is generally a consultation period. In the case of the 5.5% pay increase for teachers, this consultation lasts 10 weeks.
The rise may have resulted from a dispute with unions, which takes time to resolve.
Government budgets are set each year, and the resulting funding may not be allocated until after the start of the new year.
Trust or school-wide, this can present a budgeting issue. Budgets are signed off before summer, often having to anticipate any pay award disputes underway and how they might be resolved. What if your team doesn’t factor in the right increase and the correct support?
Then there is the focus of this blog: the issues backdated pay can bring to a pay run.
Managing Complexities
If the school or MAT aligns with government pay guidance, payroll teams must accurately calculate and distribute owed amounts from previous months, and they have to pay this money in the nearest available pay run.
This process can be complicated by how the pay award applies to different roles, hours worked, pay scales in your trust, and any other relevant contractual terms. These may vary across a MAT because it consists of several schools.
Consequently, workload increases. Back-office payroll teams may need to work overtime or bring in additional help to meet deadlines. But the bad news is that accuracy and compliance are non-negotiable. Payroll has to be ‘right first time’, and that includes for pay awards.
This is a sponsored article, brought to you by IRIS Education.
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