Cloquet district staff outline heavy payroll workload as board weighs ending annualized "spread" pay

Adrian Strickland, the district accountant, told the Cloquet Public School District board on Nov. 10 that recent law changes and rising turnover have layered new reporting burdens on a payroll team that processes pay for roughly 700–800 employees.

Strickland, in an informational presentation, described a policy change made Aug. 14, 2023 (policy 423.1) that moved some groups from annualized or "spread" pay to a two‑week prior‑period delay (timesheet pay) to simplify state reporting requirements for unemployment and the new ESST/paid‑family‑medical provisions. He said the change makes some regulatory reporting easier but also raised contractual and operational complications for year‑round staff and groups whose contracts reference pay‑period language.

Payroll staff told the board that, because some employee groups remain on spread pay while others are paid hourly, payroll processors must frequently perform manual overrides and manage multiple pay codes. A staff member described how selecting the wrong pay code can cause large underpayments or overpayments and, in overpayment cases, create collection problems because wage‑recovery can be legally complicated.

"There is so much room for overpayment or underpayment," a payroll speaker said, describing a system that requires two employees to manually handle payroll for several hundred workers throughout the year.

Staff estimated roughly 120 employees would need to switch if the district moved more groups to timesheet pay; they said some year‑round staff already transitioned and that the district would provide January notice to affected employees if the board directed implementation. The business office estimated adding one full‑time administrative payroll position could cost about $40,000–$60,000 in salary plus benefits, and cautioned that adding staff would require offsetting budget reductions elsewhere.

Payroll staff also raised uncertainty about how the state will interpret ESST/paid family medical calculations. "We have not gotten some clear answers from the state on certain things," a payroll speaker said, noting conflicting guidance on whether pay basis would be calculated like unemployment or by a highest‑quarter earnings approach. They said that unresolved state guidance could produce significant differences in paid‑family‑medical benefits for employees paid on different schedules.

Board members and the superintendent framed the choices as a trade‑off: either move more employees to timesheet pay to reduce manual processing or add central office staff to keep spread pay. The superintendent said the issue has been under discussion with bargaining units for multiple years and emphasized there was no action tonight: "This is just giving you some information so that you had time to think about it," he said.

Public commenters and the union warned that removing the autopay option could drive staff departures. Nicole Malewski, who identified herself as Washington Elementary staff in the American Indian Education Program, said the autopay schedule "allows us to budget and care for our families year round" and urged a small committee that includes hourly staff to seek solutions. Tom Whiteside, legal representative for AFSCME members, said his members "are not interested in just giving that up without having some sort of solution that will work for them." A letter read aloud from a paraprofessional, Rebecca Bork, warned that losing the autopay option would cause financial hardship.

The board did not take formal direction at the Nov. 10 meeting; staff said they will return with more information and be available at the next meeting to answer questions.