Deferred Pay as a Payroll Option for Academic Year Faculty
Tentatively Available Beginning FY26 Pending Policy Approval in Spring 2024
Background
In Spring 2022, Faculty Senate formed a working group to review and make recommendations about bringing back the option for faculty on academic year appointments to have their salary paid over twelve months. The catalyst for this work was a combination of faculty interest and its potential to retain and recruit faculty.
Previously, U of I offered this benefit until 2017 when it was discontinued as an option for newly hired faculty based on the misalignment of the work period and the payroll period. Faculty members who were on the old deferred pay system were allowed to remain on it. Currently, U of I has two different payroll schedules for faculty on academic year contracts.
The 2022 Faculty Senate deferred pay working group found great interest in offering deferred pay as an option for faculty on academic year contracts. Faculty on academic year contracts would also have the option to remain on a standard pay schedule in which their pay aligns with the academic year calendar.
In December 2023, Faculty Senate endorsed the recommendation to implement deferred pay as an option beginning in Summer 2024. President Green reviewed the recommendation and supported the implementation of deferred pay, but with a revised timeline to begin in Summer 2025 citing the challenges for faculty on the legacy deferred pay system to prepare for the six-week gap in pay.
To offer deferred pay, all academic year faculty payroll schedules need to be aligned. As a result, there will need to be a reset of the payroll schedule. During this schedule reset, faculty on the legacy deferred pay system will experience a six-week gap in pay (three paychecks) while the payroll schedules are realigned. Additionally, faculty on standard pay still must budget their pay over the summer months.
Implementation Timeline
The Provost’s Office will work with Faculty Senate and other units on campus to implement deferred pay as an option for faculty on academic year contracts beginning summer 2025 (FY26). The implementation involves updating policy and processes.
Impacts
- Faculty on the legacy deferred pay system need to plan for a six-week disruption in pay while the payroll schedules are aligned.
- Salary for the 2025-26 contract will remain unchanged; however, faculty will not receive three paychecks in late summer 2025 as they would under the legacy deferred pay system. They will receive the July 3, 2025, paycheck and then they will have a six-week gap until pay begins for Fall semester 2025 under the new pay schedule. They will not receive a paycheck for the following dates:
- July 18, 2025
- Aug. 1, 2025
- Aug. 15, 2025
- Paychecks will resume on Aug. 29, 2025. This will be the first paycheck of the 2025-26 appointment. In spring 2025, they can decide to opt into the new deferred pay system and be paid over 12 months for your academic year contract or to opt into the standard pay system and be paid during the contract period.
- Salary for the 2025-26 contract will remain unchanged; however, faculty will not receive three paychecks in late summer 2025 as they would under the legacy deferred pay system. They will receive the July 3, 2025, paycheck and then they will have a six-week gap until pay begins for Fall semester 2025 under the new pay schedule. They will not receive a paycheck for the following dates:
- Faculty on standard pay will need to continue to budget for the thirteen-week summer period during summer 2024 and summer 2025. If they opt into deferred pay, their salary will be deferred beginning summer of 2026. In addition, starting in 2025-26, the standard pay schedule will be adjusted to be paid over 20 pays rather than the current 19.5 pays. This will eliminate the one half-pay that occurs either at the start or the end of the fiscal year.
FAQs
Please check back as this is an evolving list. Submit additional questions to the Vice Provost for Faculty at dkr@uidaho.edu.
- Full-time faculty on Academic Year contracts can opt in to deferred pay beginning Spring 2025. Pay will be deferred for the 2025-26 AY contracts. Once deferred pay is selected, there is no need to opt in again. However, these faculty may also elect to return to standard pay in future years.
- Must start the Academic Year on deferred pay; faculty who begin mid-year must wait to join deferred pay until the following year.
- Faculty must have a 1.0 FTE appointment for the entire academic year.
Faculty members who were on the deferred pay system prior to 2017 are currently on the legacy deferred pay system. To offer deferred pay to all academic year faculty, the payroll and work periods need to be aligned. Faculty on the legacy system receive pay before their contracted work period. To reset the schedule, faculty on the legacy system will experience a disruption in three paychecks for summer 2025:
Salary for the 2025-26 contract will remain unchanged; however, you will not receive three paychecks in late summer 2025 as you would under the legacy deferred pay system. You will receive your July 3, 2025, paycheck and then you will have a six-week gap until pay begins for Fall semester 2025 under the new pay schedule. You will not receive a paycheck on the following date:
- July 18, 2025
- Aug. 1, 2025
- Aug. 15, 2025
Paychecks will resume Aug. 29, 2025. This will be the first paycheck of the 2025-26 appointment.
The new deferred pay system requires a reset in the payroll schedule from 19.5 pay factors to 20 pay factors. The contract period and job duties remain the same for positions, but the Banner system requires an even number of weeks in the pay schedule (and not split pay periods) to avoid errors and manual work. In other words, the academic year will remain on the 39-week work schedule, but the payroll will be paid out over 40 weeks. The summer schedule will remain the same.
No, deferred pay will be one of two options for payroll offered to faculty on AY contracts. Standard pay is the default way to be paid and this aligns with the academic contract. Faculty desiring the deferred pay option must make an affirmative selection.
No. You received that incentive to stop using the old spread pay system.
The old system of spread pay relies on paying faculty before their contract starts, which creates significant challenges. The updated process will allow the administrative systems (Banner) to manage these deferred pay schedules in the manner intended and reduce the administrative burden associated with managing those pay schedules. Likewise, the new system allows for contracts for standard pay and deferred pay to operate with the same payroll schedule assumptions. We can only have one payroll system for academic year faculty. It is no longer possible to support two distinct payroll systems for academic year faculty.
Yes, but they will have to manage a one-time disruption in three pay periods in late summer 2025.
No, you will still be paid the same amount for your work according to your contract.
Faculty who hold administrative appointments (e.g. associate dean, department chair, program director, etc.) and who receive an administrative stipend can opt into having their base salary paid as deferred pay, but the administrative stipend must be paid over the AY (nine months). This is because these positions often fluctuate or start at different points in the year. The new system has difficulty accommodating the variability with these types of positions and so this part of the appointment will be treated separately.
No. Faculty are only eligible to be on deferred pay if they have a 1.0 FTE appointment for an entire academic year.
This information is forthcoming and a solution will be in place by the time of implementation.
If you have direct deposit, you can split your paycheck into another account with your current bank or split your paycheck to another bank with another account. View the instructions to set up direct deposit and split your paychecks. You can decide how much you would like to save. To make up the different gaps in pay, these are the percentages you would need to save from your academic year paycheck to manage that gap fully on your own:
Three paycheck gap for the legacy deferred pay schedule reset
12% (March 26 of the payroll schedule)
Summer 13 week gap between academic years
23% (June 26 of the payroll schedule)
Currently, several local and national banks offer high interest rate savings accounts. As you budget for the gaps in pay, you might consider saving a percentage of funds into a higher interest rate savings account for a better return on these funds.
There are other ways to save and invest your funds. Please consult your financial advisor about these options.
U of I also offers low-cost loans for employees through a voluntary benefit program. These are repaid through U of I payroll deduction.